Just Because You Qualify for a Home Loan Doesn’t Mean You Can Afford It: What You Need to Know

In today's housing market, especially here in California, many buyers are finding themselves in a tricky situation. Just because you can qualify for a home loan doesn't necessarily mean you can comfortably afford it. With housing costs climbing and affordability becoming a bigger issue, it's more important than ever to really understand what you're signing up for when you take on a mortgage.

The Problem with High Debt Ratios

When you're getting approved for a mortgage, it's common for lenders to allow up to 45-57% of your gross income to go toward housing expenses and other debt, like credit card payments. That’s a huge portion of your income. The kicker here? They're basing that percentage on your gross income—the money you earn before taxes, benefits, and 401k contributions.

In California, by the time Uncle Sam and your benefits packages have taken their cut, most people are left with about half of their gross income. So if you're approved to spend 45-57% of your gross income on housing and debt, you can be looking at a tight budget once your paycheck hits your account. This is where many homebuyers get caught off guard, and it's something we need to talk about before making any big decisions.

When It Might Make Sense

There are, of course, exceptions. Some buyers have additional income streams—like a side hustle or a small business—that can’t be factored into their loan approval process. In those cases, their ability to pay is much more flexible than what the loan documents might show. This is where Your Home Loan Surgeons step in to help people get a real understanding of what they can afford, considering all of their income sources, not just the ones lenders can verify.

The Conversation You Need to Have

As Your Home Loan Surgeon, it's our job to look out for you—not just now, but for your future too. That’s why we often have to have difficult conversations with our clients when we see they might be stretching themselves too thin. If you qualify for a mortgage but still feel uneasy about whether you can truly afford it, we need to talk. It's crucial to look beyond the numbers on paper and think about what life will actually feel like with that monthly payment.

Why Owning a Home Is Still Worth It

That said, if you're in a position to buy and you feel comfortable with the payments, homeownership is one of the best decisions you can make. Based on amortization and appreciation alone, a home is your best hedge against inflation. Over time, you’ll see how paying down your mortgage builds equity, and how rising property values increase your net worth. In fact, it’s one of the most effective ways to build generational wealth and create financial stability for the future.

The Bottom Line: Buy vs. Rent or Cost of Waiting

While qualifying for a mortgage is a huge achievement, it’s just the first step. What matters even more is whether you can comfortably afford that home—and continue to afford it without sacrificing your quality of life. That’s why we’re here to help you decide what’s best for you, whether that’s buying now or continuing to rent. As Your Home Loan Surgeon, we can show you a Buy vs. Rent comparison or a Cost of Waiting analysis so you can see the bigger picture and make the most informed decision.

If you want to dive deeper into the numbers or explore whether homeownership is the right move for you right now, let’s connect and have a conversation. It’s about more than just qualifying—it’s about thriving.