The estimated home price you can afford helps you understand how ready your budget is to buy a home.

Your prequalification estimate helps you understand how ready you are to get prequalified for a mortgage and start shopping. Real estate agents and sellers prefer to know you’re prequalified before you go to open houses and make offers. 

These two numbers don’t need to match and often won’t. But when they’re reasonably close and realistic, you could be ready to get prequalified and start shopping for a home.

Here are two common ways to increase how much home you can afford.

Reduce your monthly debt. Paying off credit cards or other loans will improve your debt-to-income ratio. That increases how much home you can afford.

Increase your cash to buy. The more you have for a down payment and closing costs, the more home you can afford. Check out our home loans that make buying a home more affordable.

Use the calculator to explore how changing these numbers increases the estimated home price you can afford. The Rocket Money^SM app can also help increase the amount of home you can afford by empowering you to work on your credit, spending and savings.

Upfront costs. Buying a home requires services like the appraisal, credit report, home inspection, title search and the processing of your loan. The costs for all these services are typically paid at closing, and they can range from 2 – 5% of the purchase price. At 3% for a $200,000 house, that’s $6,000.

Costs after you own the home. Paying property taxes and homeowners insurance are part of owning a home. Some types of mortgages require mortgage insurance. For most people, a portion of these costs are added to your monthly mortgage payment.

When using the calculator and looking at an estimated home price you can afford, check out the Monthly Payment and Cash To Buy sections. They’ll help you better understand the costs you need to consider.

Our home affordability calculator was designed to help you answer this question, so you’re in the right place. When the estimated home price you can afford and your prequalification estimate are realistic, reasonably close, and you want to move within the next 6 months, it could be time to apply.

If your time frame for buying a home is farther out, the Rocket Money^SM app can help you get ready by working on your credit, spending and savings.

If your prequalification estimate comes in low, more cash to buy usually helps. You don’t need a 20% down payment to buy a home. But most buyers need at least 3% of the home's purchase price for a down payment, and another 2% to 5% for closing costs.

Try increasing your cash to buy in the calculator and see what happens. If the estimated home price you can afford seems good and it’s just cash to buy holding you back, call or chat with a Home Loan Expert. We have loan options that make buying a home more affordable.

The less debt you have, typically the more home you can afford. That’s because you have more income that can go toward your mortgage payment. In this case, debt is monthly payments for things like credit cards, student loans and car payments.