Do the Math – A Mortgage You Can Afford

The Confident Buyer Series – Week 3 – Do the Math – A Mortgage You Can Afford

One of the most common mistakes homebuyers make? Basing their home search on a purchase price rather than a monthly payment. Which is why we are walking through how to do the math to find a mortgage you can afford!

If you’re planning to buy a home in Northern Colorado, getting clear on your true budget is one of the most important things you can do.

Most buyers assume the number their lender pre-approves them for is what they should spend—but that number doesn’t always align with what you’re actually comfortable spending month to month.

This week’s article will show you how to flip the typical approach and start with your monthly payment first—then work backwards to find your price range.

Why Monthly Payments Matter More Than Price

It’s easy to say, “I’ve been approved for $500,000”—but that doesn’t mean you want the monthly payment that comes with that price tag.

Here’s the reality: Two homes with the exact same purchase price can have wildly different monthly costs depending on taxes, insurance, HOA fees, or even the type of home (condo, townhome, or single-family).

That’s why I always recommend starting with your target monthly payment—and building your home search around that.

What to Consider When Setting Your Monthly Budget

Before you fall in love with homes online, take some time to look at your actual monthly budget. Be honest about your lifestyle, spending habits, and future plans.

Here are a few things to factor in:

• Property taxes, insurance, and HOA fees (I can help you estimate these for homes in Northern Colorado)
• Ongoing monthly costs like utilities, commuting, childcare, and subscriptions
• Home maintenance (plan to set aside 1% of the purchase price per year)
• Your lifestyle: Do you want to travel frequently? Save aggressively? Avoid giving up your gym or streaming services? Build that into your budget.
• Future life changes: Are you planning to grow your family, change jobs, or take on new expenses?

A Quick Rule of Thumb

If you’re currently renting, here’s a shortcut to estimate what you might comfortably afford:
Multiply your rent by 1.33.

That’s a ballpark for a mortgage payment that won’t stretch you too thin—especially when you account for the tax advantages of owning a home.

(Example: $1,500 rent × 1.33 = ~$2,000 mortgage)

A Note on Down Payments

You might be surprised how little your monthly payment changes with a larger down payment.

Every $10,000 more you put down typically reduces your monthly payment by only about $50.
So, saving for years to hit an arbitrary down payment goal may not be necessary—especially with so many great programs available in Colorado to help reduce upfront costs.

We’ll dive deeper into down payment strategies next week.

Let’s Make the Math Work for YOU

If you’re feeling unsure about how to map your monthly budget to a purchase price, you’re not alone—and you don’t have to figure it out on your own. I’d be happy to help you walk through the numbers and build a home search strategy around your comfort zone.

Let’s schedule a time to chat and talk about what’s realistic (and empowering!) for your situation.

Next up in The Confident Buyer Series: Where to Find Money for a Down Payment

You’ll learn creative ways to fund your purchase and find out why you may not need 20% down after all.