What house can I afford?

The answer starts with two things: your income and your existing monthly debt payments.

Your numbers

Gross monthly income (before taxes)

$4,000

Existing monthly debts (car, student loans, credit cards)

$300

Down payment saved

$10,000

Max housing payment

$780

per month

Estimated home price

$130,000

Your debt ratio

7.5%

With $10,000 down and your income, lenders will look at a home in the $120,000–$140,000 range. Build that down payment and eliminate debts and your buying power grows fast.

The 43% rule

Lenders look at your debt-to-income ratio (DTI). Your total monthly debts, including your new mortgage payment, should stay under 43% of your gross income. The sweet spot most lenders like to see is under 36%. The lower your existing debts, the more house you can afford.

Which loan is right for me?

The best loan depends on your credit score, your savings, and whether you've served in the military.

300 Poor580 Fair620 Good740 Very good800+ Excellent

FHA Loan 580+ credit

Government-backed. 3.5% down payment. Great for first-time buyers with limited savings or a less-than-perfect credit score. Requires mortgage insurance (MIP). KC limit: $541,287.

Conventional 620+ credit

Not government-backed. As little as 3% down with strong credit. No mortgage insurance once you hit 20% equity. Best rates go to 740+ scores.

VA Loan Military

For veterans and active military. Zero down payment. No mortgage insurance. Usually the lowest rates available. One of the best deals in lending.

USDA Loan Rural areas

For homes in eligible rural and suburban areas. Zero down payment. Income limits apply. Worth checking if you're open to living outside the city.

You don't choose your loan from a bank, a government office, or a broker separately. A local mortgage lender like Fountain Mortgage can offer all of these under one roof. The loan type is separate from where you go to get it.

What about bank loans vs. independent lenders?

Banks (like Chase or Wells Fargo) offer mortgages, but they only offer their own products. Independent mortgage companies like Fountain work with multiple investors and can often find you a better rate. Credit unions can be a solid middle ground. The key is to shop around and compare at least three quotes before you commit.

Rates right now

As of May 2026. Freddie Mac national averages. Your actual rate depends on credit score, down payment, and loan type.

Loan type	Term	Avg rate	Est. payment on $250k
Conventional Most common	30-yr fixed	6.37%	$1,560/mo
Conventional	15-yr fixed	5.72%	$2,074/mo
FHA	30-yr fixed	6.13%	$1,521/mo
VA Military	30-yr fixed	5.50%	$1,419/mo
Jumbo (over $832k)	30-yr fixed	6.49%	—

See what rate does to your payment

Loan amount

$250,000

Interest rate

6.4%

$1,560/mo

estimated monthly principal + interest (30-yr fixed)

Does not include taxes, insurance, or HOA. Add approximately $500–$700/mo for a typical KC home.

A 1% rate difference on a $250,000 loan changes your payment by about $150 per month. Over 30 years, that's over $54,000. This is why shopping around matters.

Renting vs. buying

The honest answer is that it depends on how long you plan to stay. Here's the real comparison for the Kansas City area.

KC median home price

$325K

Avg KC rent (2BR)

~$1,400

Home value growth (YTD)

+6.7%

Renting

Monthly cost stays predictable short-term

No maintenance costs or surprise repairs

Flexibility to move for jobs or life changes

Your payment builds zero equity for you

Rent typically rises 3–5% per year

Landlord controls your living situation

Buying

Every payment builds equity you own

Fixed mortgage never rises (30-yr fixed)

KC homes up 5.8% this year alone

Tax benefits: mortgage interest deduction

You decide the rules — pets, paint, renovate

Needs down payment and closing costs upfront

Kansas City's median home price is 33% below the national average. In most KC zip codes, a mortgage payment on a starter home is within $100–$200 of a comparable rent payment. After 5 years, buyers in KC typically come out $47,000 or more ahead compared to renting the same amount of time.

The break-even rule

If you plan to stay in a home for 5 or more years, buying almost always wins financially in a market like Kansas City. If you might move in 2–3 years, renting can make more sense. The goal is to own as early as you can, stay as long as you can, and let the asset grow.

Start building now, even if you're 17

Open a savings account today labeled "house fund." Work on your credit score (get a secured card, pay it off monthly). Avoid taking on car debt you don't need. The people who buy their first home in their mid-20s are the ones who started thinking about it in high school.

HOMEBUYER ACADEMY