Affordability guide
How much house can you afford in Michigan?
Short answer
Lenders don't approve a price — they approve a monthly payment, usually capping your total debts at 43–45% of gross income and pricing best under 36%. As a rough guide, a Michigan household earning $75,000–$90,000 can afford around a $300,000 home at today's rates, depending on debts and down payment. The two local factors that move the number most are county property taxes and whether you carry PMI below 20% down.
The 28/36 rule
A common affordability guideline keeps your payments within two limits:
- Front-end (28%): keep your housing payment under 28% of gross monthly income
- Back-end (36%): keep all debt payments — housing plus car, student, and credit-card minimums — under 36%
Many loan programs allow more; FHA can stretch toward 45–50% with strong compensating factors. But the 28/36 zone is where a payment stays comfortable rather than tight.
How lenders actually decide
The ceiling is your debt-to-income ratio: total monthly debts divided by gross income. A lender works backward from the maximum ratio to a payment, then to a price.
That price includes the full PITI (principal, interest, taxes, and insurance), not just principal and interest. So two Michigan homes at the same price can support different approvals — a higher-tax county eats into the payment room.
Cash matters as much as income
Affordability isn't only about the monthly payment — it's also the cash to get in. A bigger down payment lowers the payment and can eliminate PMI, but Michigan's MI 10K DPA can supply up to $10,000 toward that cash, changing what's reachable.
- Down payment: more down lowers the payment and can drop PMI
- Closing costs: budget 2–4% for buyers
- Reserve: a cushion for the first tax and insurance bills, which arrive fast after closing
Frequently asked questions
How much house can I afford on a $60,000 salary?
Generally in the $180,000–$240,000 range, depending on your other debts, down payment, and county taxes. Lower your monthly debts or add down payment assistance and the top of that range rises.