The Real Cost of Buying a Home: The biggest mistake buyers make is focusing only on the purchase price. Your monthly payment is made up of several moving parts: 1. Down Payment: • Typically ranges from 0% to 20%+ • Lower down payments are possible (FHA, VA, USDA, conventional 3%) • More down = lower monthly payment (but less cash on hand). 2. Closing Costs: These are upfront costs due at closing, usually 2%–5% of the purchase price. They include: • Lender fees • Title and escrow fees • Prepaid taxes and insurance. 3. Monthly Housing Costs: This is where affordability becomes real. Your payment may include: • Principal + interest • Property taxes (higher in Texas) • Homeowners insurance • HOA dues (if applicable) • Mortgage insurance (if under 20% down). This total payment—not the price—is what you need to be comfortable with.

The 30–33% Rule (And Why It Matters): A solid guideline: Keep your total monthly housing payment at 30–33% of your gross income. But here’s the nuance most people miss: • This rule doesn’t account for lifestyle • It doesn’t factor in debt, childcare, or savings goals • It doesn’t reflect rising costs like insurance and taxes. So use it as a starting point—not a decision-maker. What You Should Really Be Asking: Instead of “How much can I afford?” ask: • How much do I want to spend comfortably each month? • Will this payment still feel okay if expenses increase? • Am I still able to save and invest? • Does this fit my lifestyle—not just my approval limit?

Tools That Help You Get It Right: Online calculators can be helpful—but most are overly simplified. They often: • Underestimate taxes and insurance • Ignore local factors (like MUD/PID taxes in Texas) • Give you a number that looks better than reality. A better approach: • Use calculators for a rough range • Then have a lender build a real payment scenario based on your target areas. A Smarter Way to Think About Affordability: Here’s a more grounded framework: Step 1: Start with your ideal monthly payment: Not your max—your comfort zone. Step 2: Factor in all costs: Taxes, insurance, HOA, etc. Step 3: Reverse-engineer your price range: Now you’re working from reality, not guesswork. The Truth Most Buyers Learn Too Late: • Being “approved” doesn’t mean you should spend that much • A home can look affordable on paper and still feel stressful monthly • The right home is one that supports your life—not stretches it.