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      For Your Life February 5, 2026

      Simple tips for discovering your home price range and using a mortgage calculator

      Buying a house can be one of the biggest purchases you ever make, and finding your price range is an important step to take before you start looking at homes. Discovering your home price ahead of time helps you know that when you find your dream home, you can afford it, and you are not taking on more than you can handle.

      Determine your buying potential

      When you decide to start looking for a new home, you may start by searching online or driving through the neighborhood you’d like to live in. But before that, determining your buying potential is a great first step.

      Visiting with a mortgage loan officer, you’re able to get prequalified for a loan and learn how much you can spend to still live a comfortable lifestyle. This can also provide extra confidence when negotiating with a seller.

      When you meet with your banker, they will ask you for several items, like paystubs, tax information and bank statements. They may also ask if you own any land, if you pay child support, if you've recently bought a car, or similar questions. Make sure to disclose pay increases at work, annual bonuses that may show up on your bank statement as a large deposit, and any beneficial investment account balances. All of these can affect the final amount you’re able to spend.

      Discovering your home price: determining a spending amount

      Often, your banker will recommend limiting the amount you spend on housing to 25% of your monthly take-home pay. Some bankers also use a measure called the debt-to-income ratio, or DTI, which factors in debts such as credit cards, car loans, student loans and your mortgage. This is recommended to be at 43% or below.

      There are some other costs associated with buying a house and the mortgage that can come with it, including the taxes, insurance and utilities to live in the home. When determining your total budget, be sure to include those costs in the final number, and set aside money for future savings and home maintenance as well. This will help you afford the home without having to change your lifestyle. Keep in mind that the amount you are approved to borrow may not necessarily be what you want to spend.

      Questions to ask before making an offer on a home

      Before putting in an offer on a home, there are some questions you and your banker should talk about first. These include:

      • How much money do I want to save each month for retirement or travel?
      • Do I have enough saved for closing costs or unexpected expenses?
      • How much can I put toward a down payment without emptying my savings account?
      • What is my total monthly debt?

      Discovering your home price: the mortgage calculator

      When mortgage lenders are deciding whether or not to approve you for a home loan, they look at your debt-to-income ratio. This ratio shows how much of your income is spent on debt payments each month.

      Mortgage lenders typically like to see borrowers with debt-to-income ratios below 36%, including your proposed monthly mortgage payment. If you earn $6,000 a month pre-tax and you have no other debts, you may be able to afford a monthly payment up to $2,160 (6,000 × 0.36). If you have a great credit score, you may be able to qualify with a higher DTI — potentially up to 50%.

      Figuring out the answers to these questions and beyond will ensure that the home you purchase can be a comfortable living situation and a smart investment. Be sure to ask how your banker can help, as they may have more resources and assistance program ideas to help you purchase your dream home.

      For more mortgage and home-buying guidance from Old National Bank, including a mortgage calculator and home-buying assistance programs, click here.

       

       

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