How lenders decide your limit
Lenders look at two ratios. The housing payment (principal, interest, tax, insurance and HOA) is usually kept under 28–31% of gross monthly income. All debts together, including the housing payment, are kept under 36–43%. Your price is limited by whichever ratio you hit first.
Why Florida limits come in lower
- Homeowners insurance in coastal counties often costs $4,000–$8,000 a year, and flood insurance is extra.
- Property tax resets to the purchase price, so the seller's bill is not a guide.
- Condo fees have risen as associations fund the reserves required by the 2022 condo safety laws.
Every $100 a month of insurance or HOA reduces what you can borrow by roughly $15,000 at today's rates.
Getting a real insurance number first
Ask an insurance agent for a quote on a specific address before you set your budget. Roof age, wind mitigation features such as hurricane straps and impact windows, and the FEMA flood zone can move the premium by thousands of dollars between two houses on the same street.
Questions
Does this include mortgage insurance?
No. With less than 20% down, conventional loans add mortgage insurance, which lowers the maximum price a little.
