When applying for a home loan, you need to consider your personal finances. How much you make against how much you are in debt will probable establish how much a lender will let you to borrow.

These are debatable terms in real estate because not all lenders apply the same definition to each expression. In fact, one leading real estate dictionary contains neither expression because their definitions are uncertain.

According to economists, housing is “affordable” it if costs no more than 30% of a family’s income. For instance, a family making $100,000 a year can afford to put $30,000 a year into rent or into house payments and taxes