The number that stops most Bay Area buyers before they start is not the one lenders actually use.
Run the familiar 36% rule against a $1.3 million home and it tells you that you need roughly $313,000 a year. Run the same house through the debt-to-income ceiling underwriters actually approve to, and the answer comes back closer to $226,000. Both numbers are real. They answer different questions.
The 36% rule tells you what is comfortable. The ceiling, which reaches 50% and in some programs 56.9%, tells you what is possible. Where you land between the two is a decision, not a calculation, and nobody can make it from a national blog post.
The full piece works through the local costs the national guides leave out, why every recurring debt counts harder than an equivalent amount of savings, why ten percent is the highest median down payment first-time buyers have made since 1989, and the $20,000 to $30,000 that tends to land beyond the down payment itself.
What the two rules actually say
Read the full breakdown on harvrealtor.net
Seven frequently asked questions, the reserve requirements, the local closing costs, and the arithmetic behind both numbers.
This dispatch is a summary. The complete piece is published on harvrealtor.net.
Harv Balu, REALTOR®, DRE #02195792, REALTY EXPERTS®. This is general information, not lending advice. Rates and program guidelines change. Talk to a licensed lender about your own file.