How Much House Can I Actually Afford in Texas?

Buying your first home in Texas is an exciting milestone — but one of the first questions almost every buyer asks me is: "How much house can I actually afford?" It's a great question, and the answer depends on more than just your income.

Affordability Is More Than Your Salary

Many first-time buyers assume a certain income equals a certain home price — but it's not that simple. Lenders look at a combination of factors: your monthly debt payments, credit score, down payment, and current interest rates. Two buyers with the same income can qualify for very different loan amounts.

The 28/36 Rule Explained

One of the most common guidelines in mortgage lending is the 28/36 rule:

• The 28% front-end ratio: Your monthly housing payment (principal, interest, taxes, and insurance) generally shouldn't exceed 28% of your gross monthly income.
• The 36% back-end ratio: Your total monthly debt payments — mortgage plus car loans, student loans, and credit cards — generally shouldn't exceed 36% of gross monthly income.

For example, on a $6,000 gross monthly household income, that guideline points to a housing payment around $1,680 and total debt payments under $2,160. (Real-world loan programs can allow higher ratios depending on your full picture — that's exactly what pre-approval sorts out.)

What Texas Lenders Look At

• Credit score — higher scores generally unlock better pricing and more options
• Debt-to-income ratio (DTI) — how much of your income already goes to debt
• Down payment — more down means a smaller loan, and can eliminate PMI
• Employment history — stable, consistent income, usually two years in the same field
• Savings and reserves — money left after closing reassures lenders you can handle surprises

The Texas-Specific Costs People Forget

Texas has no state income tax — great for your budget. But Texas also has some of the highest property tax rates in the country. Depending on the county, property taxes commonly run from about 1.5% to over 3% of assessed value per year.

On a $300,000 home at a 2.5% rate, that's $7,500 a year — roughly $625 a month added to your payment. Around Houston, homeowner's insurance also runs above the national average thanks to our weather. Both belong in your affordability math from day one, and both are built into my mortgage calculator.

Pre-Approval Gives You Your Real Number

Rules of thumb are a starting point. The accurate way to know what you can afford is a pre-approval: a real review of your income, credit, and savings that produces a real number — and makes you a stronger buyer when you're ready to offer.

Ready to Find Out What You Qualify For?

I help Texas first-time buyers understand their options and get pre-approved with confidence — in English or Spanish. Reach out today or call 832-894-7676 for a free pre-approval consultation.

---

Daisy Castro · NMLS #2592627 · Equal Housing Lender. This article is general information for Texas buyers — not financial, tax, or legal advice, and not a commitment to lend. Programs, limits, and guidelines change and vary by situation; figures current as of July 2026.