{
  "article": {
    "slug": "what-caps-what-you-can-afford",
    "title": "What is actually capping what you can afford",
    "url": "https://financely.ai/articles/what-caps-what-you-can-afford.html"
  },
  "answer": "Two rules cap a mortgage: the front-end ratio limits housing cost alone to about 28% of gross monthly income, and the back-end ratio limits housing plus all other debt payments to about 36%. Whichever binds first sets your ceiling, and which one it is decides your next move. If other debt binds, paying it down raises the ceiling by roughly $11,000 to $14,000 per $100 a month retired. If income binds, paying off the car changes nothing and only a larger down payment, a lower rate or more income will help.",
  "method": "Every figure is produced by a deterministic calculation engine and verified at build time against that engine’s output. Inputs are included so any figure can be reproduced.",
  "claims": [
    {
      "id": "what-caps-what-you-can-afford-1",
      "statement": "A household earning $135,000 with $1,600 a month of other debt payments and $40,000 down at 6.55% is capped by the back-end rule, not by income.",
      "verified": true,
      "computedBy": "purchase lens",
      "inputs": {
        "grossAnnualIncome": 135000,
        "monthlyDebtPayments": 1600,
        "downPayment": 40000,
        "mortgageRate": 0.0655
      },
      "verifyAt": "https://financely.ai/tools/purchase.html"
    },
    {
      "id": "what-caps-what-you-can-afford-2",
      "statement": "Their purchase ceiling is $332,743, below the $418,245 their income alone would allow.",
      "verified": true,
      "computedBy": "purchase lens",
      "inputs": {
        "grossAnnualIncome": 135000,
        "monthlyDebtPayments": 1600,
        "downPayment": 40000,
        "mortgageRate": 0.0655
      },
      "verifyAt": "https://financely.ai/tools/purchase.html"
    },
    {
      "id": "what-caps-what-you-can-afford-3",
      "statement": "Each $100 a month of retired debt buys back $12,215 of purchase price at a 6.55% rate.",
      "verified": true,
      "computedBy": "purchase lens",
      "inputs": {
        "grossAnnualIncome": 135000,
        "monthlyDebtPayments": 1600,
        "downPayment": 40000,
        "mortgageRate": 0.0655
      },
      "verifyAt": "https://financely.ai/tools/purchase.html"
    }
  ]
}