📊 How Much House Should You Buy? Avoid Becoming “House Poor” 🚫🏡

🏠 How Much House Can You Really Afford in 2026? A Smart Mortgage Guide 💰

February 16, 2026•3 min read

🏠 How Much House Can You Really Afford in 2026? A Smart Mortgage Guide 💰

📊 How Much House Should You Buy? Avoid Becoming “House Poor” 🚫🏡

How Much House Should You Really Buy?

The short answer: Less than the bank says you can.

As a mortgage broker at Medallion Funds, I see this mistake all the time. Buyers focus on the maximum approval amount instead of the optimal purchase price for their life, goals, and long-term financial strategy.

Getting approved and buying smart are two very different things.

Let’s break this down the right way.

Step 1: What Lenders Actually Calculate

Most buyers think the approval number equals what they should spend.

Lenders calculate:

·Debt-to-Income Ratio (DTI)

·Credit score

·Income stability

·Assets and reserves

For conventional loans, lenders may approve you up to:

·43–50% total DTI (sometimes higher with strong compensating factors)

That means nearly half your gross monthly income could go toward debt.

That’s approval math.
It’s not lifestyle math.

Step 2: The Real Risk — Becoming “House Poor”

Being house poor means:

·Your payment consumes most of your income

·You have limited liquidity

·You can’t invest, save, or handle emergencies comfortably

Your mortgage payment isn’t just principal and interest. It includes:

·Property taxes

·Homeowners insurance

·HOA dues

·Maintenance (1–2% of value annually)

·Utilities

·Future repairs

A $600,000 home isn’t just a bigger mortgage — it’s bigger everything.

Step 3: A Smarter Formula

Instead of asking, “What’s my max approval?”

Ask:

1.What monthly payment keeps me comfortable?

2.Can I still invest 15–20% of my income?

3.Do I maintain 6+ months of reserves?

4.Can I handle a temporary income disruption?

For most buyers, a housing payment between 25–35% of gross income is sustainable long-term — even if you qualify for more.

Step 4: Strategic Borrowing vs Emotional Buying

Your home is part of your financial plan.

At Medallion Funds, we help clients align:

·Mortgage structure

·Career trajectory

·Investment goals

·Exit strategy

First-time buyers often overbuy due to emotion.
Move-up buyers sometimes stretch based on lifestyle inflation.

The right home should support your wealth-building plan — not slow it down.

Step 5: Interest Rates Matter — But So Does Flexibility

In higher-rate environments:

·Payments stretch further

·Qualification tightens

·Risk tolerance matters more

Sometimes buying slightly below your max approval gives you:

·Faster principal reduction

·Refinance flexibility later

·Ability to invest in rental properties

·Less stress

Financial freedom > maximum square footage.

Step 6: Custom Strategy Matters

Every borrower is different:

·Self-employed? Cash flow analysis matters.

·Investor? Liquidity and future leverage matter.

·High-income professional? Tax strategy and capital deployment matter.

·Growing family? Stability matters.

There is no one-size-fits-all number.

The goal isn’t “How big?”
The goal is “How sustainable and strategic?”

Final Thought

The bank will tell you what you can buy.
A strategic mortgage advisor helps you decide what you should buy.

If you want to run real numbers and structure your financing intentionally, we’ll map it out clearly — income, DTI, reserves, long-term plan.

That’s how you avoid becoming house poor and build wealth the right way.

—
Bill Rapp
Medallion Funds
Mortgage & Capital Advisory

https://www.billrapponline.com/

https://findamortgagebroker.com/Profile/WilliamRappJr28883

https://billrapp.commloan.com/

https://billrapponline.com/financingfuturescre-houston-katy

https://houstoncommercialmortgage.com/

https://author.billrapponline.com

https://doctorvideo.billrapponline.com/

https://veteransvideo.billrapponline.com/

https://mortgageviking.billrapponline.com/

https://fha203h.billrapponline.com/

https://renovationvideo.billrapponline.com

https://medallionfunds.com/bill-rapp/

https://www.amazon.com/dp/B0F32Z5BH2

https://veed.cello.so/FOmzTty6oi9

https://buymeacoffee.com/vikingente3

https://creplaybookseries.billrapponline.com

https://creplaybook.billrapponline.com/

Bill Rapp - Commercial & Residential Mortgage Broker

Whether you're a first-time homebuyer, a seasoned investor, or a business owner with ambitious plans, securing the right financing is crucial. At Medallion Funds, we take the guesswork out of mortgages, offering a comprehensive suite of residential and commercial loan options to fit your unique needs. Looking for Your Dream Home? We understand the excitement and challenges of navigating the residential real estate market. Our experienced mortgage brokers will guide you through every step, from pre-qualification to closing. We offer a variety of loan programs to suit your financial situation, including: • Fixed-rate mortgages: Offering stability with predictable monthly payments. • Adjustable-rate mortgages (ARMs): Providing competitive rates for a set period. • FHA loans: Making homeownership accessible with lower down payments. • VA loans: Rewarding veterans with attractive rates and flexible terms. Investing in Your Business Future? Growth often requires capital, and we can help you unlock the potential of your commercial property. Our brokers specialize in a wide range of commercial loan options, including: • Purchase loans: Financing the acquisition of new buildings or land. • Construction loans: Facilitating the development of your project. • Refinance loans: Restructuring your existing mortgage for better terms. • SBA loans: Providing access to government-backed financing for qualified businesses. The Medallion Funds Difference: We go beyond simply finding a loan. We take the time to understand your goals and develop a personalized strategy. Here's what sets us apart: • Expertise: Our brokers have a deep understanding of both residential and commercial lending. • Competitive Rates: We leverage our strong lender relationships to secure the best possible terms. • Streamlined Process: We handle the paperwork, keeping you informed every step of the way. • Exceptional Service: We're committed to providing you with a positive and stress-free experience. Ready to Take the First Step? Contact Medallion Funds today for a free consultation. Let's discuss your financing needs and help you achieve your dreams!

Back to Blog