Before You Start Scrolling Through Open Houses, Let’s Make Sure You’re Not Guessing Your Budget! 🏡💸
You’ve been dreaming about your first home for months—or maybe even years. The Pinterest boards are full, you’ve scrolled through listings, and you’re ready to hit the open houses in Minnesota. But wait—before you fall in love with that charming bungalow or spacious two-story, it’s crucial to know how much home you can actually afford. Spoiler alert: it’s more than just the price tag of the house.
Let’s face it, navigating the mortgage world can feel a bit like playing Monopoly—you’re not always sure what you can afford until it’s too late. That’s where the KTR Affordability Calculator comes in. This tool is a game-changer, helping you figure out your home-buying budget without the guesswork. In this blog, we’ll show you how to use the calculator, what you need to think about (like taxes and closing costs), and a few pro tips to make sure you don’t end up house-poor after the move.
So, let’s dive in and figure out how much home you can really afford—no stress, no surprises!
Step 1: Start with Your Income
It all begins with you—specifically, how much money you bring in every month. Your income is the foundation of how much home you can afford, so it’s the first thing we’ll look at when using the KTR Affordability Calculator. To make sure we’re on the same page, we’re talking about gross income here—that’s your salary before taxes and deductions.
Why gross income? Because lenders want to see the big picture before deciding if you’re a good candidate for a mortgage. They want to know what you’re working with before they agree to give you a loan.
Pro Tip: Lenders typically like to see that your monthly mortgage payment, including taxes, insurance, and any HOA fees, doesn’t exceed 28–30% of your gross monthly income. This keeps you financially comfortable and ensures you can afford your home without stretching yourself too thin.
For example, if your monthly gross income is $4,500, a safe mortgage payment would be somewhere around $1,260.
Step 2: Factor in Your Debt
If you’ve got any existing debt—student loans, credit card payments, car loans, etc.—you’ll need to consider it in the equation. Lenders will calculate your debt-to-income ratio (DTI) to make sure you’re not taking on more than you can handle. In Minnesota, this is an important metric, as it determines whether you can comfortably afford the mortgage on top of your existing obligations.
The KTR Affordability Calculator includes all your debt, helping you get a more accurate estimate of your buying power.
Here’s why this matters: Your DTI ratio will affect your mortgage approval and interest rates. If your DTI is too high, lenders may suggest that you adjust your budget, pay off some debt, or consider a less expensive home.
Step 3: Don’t Forget About Taxes, Insurance, and HOA Fees
Okay, you’ve got a number in mind. The house you’re eyeing costs $1,500 a month, but that’s not the whole picture. Mortgage payments aren’t just about the loan—you need to factor in taxes, insurance, and possibly homeowners association (HOA) fees.
In Minnesota, property taxes can vary significantly depending on the county or city you’re in. So, while $1,500 a month sounds doable, when you add in your taxes and insurance, your total payment could easily rise to $1,800 or more.
The good news? The KTR Affordability Calculator takes all of this into account. You won’t be left shocked at the closing table when those extra expenses pop up.
Pro Tip: Use the calculator to estimate your full monthly payment, including taxes, insurance, and HOA fees. This gives you a true picture of what your new monthly budget will look like.
Step 4: Plan for Closing Costs
This is the part that surprises a lot of first-time buyers. You’ve probably saved up for the down payment, but have you thought about closing costs? Closing costs are the fees associated with securing your loan, like lender fees, appraisal fees, title insurance, and other administrative costs.
Here’s a ballpark estimate: Closing costs generally run between 2% and 5% of the home’s purchase price. So if you’re buying a $250,000 house, expect to pay anywhere from $5,000 to $12,500 in closing costs. That’s a big chunk of change that you’ll need to have set aside.
Pro Tip: Closing costs vary depending on where you are in Minnesota and what type of loan you’re getting. The KTR Affordability Calculator helps you estimate these fees, but always ask your lender for an official breakdown.
Step 5: Using the KTR Affordability Calculator
Now that you’ve got all the information you need—income, debt, taxes, insurance, and closing costs—it’s time to input it all into the KTR Affordability Calculator. In just a few minutes, you’ll have a solid starting point to understand how much home you can afford. Plus, you’ll know exactly what to expect for your monthly payment and how your debt affects your buying power.
This tool takes the guesswork out of the process, so you can walk into that open house with confidence, knowing your budget.
Pro Tip: Don’t just guess—use the KTR Affordability Calculator to make sure you’re looking at homes that are within your means. It’s a quick, easy way to avoid disappointment and stress down the line.
Next Steps: What to Do with Your Results
Once you’ve got your results from the calculator, it’s time to put them into action! Here are some things to consider as you move forward with your home search:
- Review your budget: Now that you know how much home you can afford, it’s time to make sure the numbers align with your lifestyle and goals.
- Consult with a mortgage expert: Schedule a call with me at KTR Loans. I can walk you through your results, answer your questions, and make sure you’re on the right track to securing the best possible mortgage for you.
- Start shopping for homes: Armed with your budget, you’re ready to start looking at homes that fit your price range.
Ready to Take the First Step Toward Your New Home?
Now that you know how much home you can afford, it’s time to take action! Don’t let the mortgage process overwhelm you—use the KTR Affordability Calculator to get a clear starting point.
Try our affordability calculator at ktrloans.com, or email me at Kyle@KTRLoans.com for a personal breakdown of your home-buying budget. I’m here to help you every step of the way, so let’s make your dream of homeownership a reality!
Pro Tip: Lenders Care About Your Debt-to-Income Ratio
To make sure you’re financially comfortable, try to keep your total housing costs (including mortgage, taxes, and insurance) under 30% of your gross monthly income. This can help you secure a better loan and keep your monthly payments manageable.
References
- Minnesota Housing Finance Agency (MHFA) – First-Time Homebuyer Programs
- Zillow – Minnesota Housing Market Report (2025)
- Consumer Financial Protection Bureau – Debt-to-Income Ratio Guidelines
Call Kyle at 651-492-1402 to discuss your options, or visit ktrloans.com to get started on your mortgage application today. Let’s figure out exactly how much home you can afford, and then go find your dream place!
