Housing
Use PITI, the 28/36 rule, and cash-to-close to size a home. Why 3% down is not the same as affordable, and how taxes and insurance move the payment.
Updated 2026-09-08 · 9 min read
Principal and interest are only the loan. Add property tax, homeowners insurance, HOA, and (if down payment is under 20%) PMI. That stack is PITI.
A $400,000 home at 6.5% with 20% down is not a $2,000 lifestyle. Taxes and insurance in many counties add several hundred a month before a single repair.
Budget earnest money, inspection, appraisal, title, prepaid taxes and insurance, moving, and an immediate maintenance reserve. Buying with $0 left in cash is how a water heater becomes a credit-card event.
Run the payment at a rate 1% higher than today's quote. If that version wrecks the budget, you are one refi-cycle away from stress.
The house has to beat rent *after* maintenance, transaction costs, and the return you gave up on the down payment. Run the All Access calculator (hash + chart) and the 12-step stay-length file — do not decide from a tweet.
Run the numbers: DTI calculator · PITI calculator · rent vs buy (All Access) · HELOC vs cash-out. Primer: how DTI actually works.
Housing costs (PITI + HOA) under 28% of gross income, and all debt payments under 36%. Lenders may approve more. Approved is not the same as comfortable.
Low down gets you in. It also means PMI, a larger loan, and a thinner equity cushion if prices dip. If the payment only works at 3% down, the house is stretching you.
Educational only. Verify IRS limits and loan quotes before acting.