By the end of this guide you will have a realistic maximum home price and monthly payment for a Church Hill purchase, built from your own income, debts, and cash rather than a generic online calculator. Calculating mortgage affordability takes about an hour if you have your documents ready: two recent pay stubs or last year’s tax return, a list of monthly debt payments, your bank balances, and a rough idea of your credit score range. I’ll run one sample household through every step so you can repeat the math with your own figures. All rates below are hypothetical and for illustration only.
Step 1: Total Your Gross Monthly Income and Monthly Debts
Brokers qualify you on gross income, meaning before taxes and payroll deductions. For a salary, divide the annual figure by 12. For hourly, commission, or self-employed income, use a 24-month average from your tax returns, since underwriters look for income that is stable and likely to continue.
Next, list only the debts that show up on your credit report:
- Car loans (monthly payment)
- Student loans (the payment on your credit report, or the program’s required calculation if the reported payment is zero)
- Minimum monthly credit card payments, not your full balances
- Personal loans and any other installment debt
Leave out utilities, groceries, phone, streaming, and insurance premiums. They matter for your budget in Step 6, but they are not part of the qualifying ratio.
The most common mistake I see is counting a co-borrower’s income but forgetting their debts. If two people are on the loan, both incomes and both sets of debts go in.
Our sample Church Hill household looks like this:
- Gross monthly income: $9,000 (combined, both borrowers)
- Monthly debts: $900 (a $450 car payment, a $300 student loan payment, and $150 in credit card minimums)
Write both numbers down. Everything that follows builds on them.
Step 2: Find Your Debt-to-Income Ratio Limits
Debt-to-income ratio (DTI) comes in two forms. Front-end DTI is your proposed housing payment divided by gross monthly income. Back-end DTI is your housing payment plus all monthly debts, divided by gross monthly income. If you earn $6,000, pay $1,800 for housing, and carry $600 in other debts, your front-end ratio is 30% and your back-end ratio is 40%.
You may have heard of a 28/36 rule. It is a long-standing guideline, not a requirement. Actual limits vary by program (conventional, FHA, VA, Non-QM), and automated underwriting can approve higher ratios when you have compensating factors such as strong credit, cash reserves, or a low loan-to-value. As of 2026, check the current rules directly: FHA guidance is in the HUD Single Family Housing Policy Handbook, and VA basics are on the VA home loans page. VA loans also weigh residual income, not just a ratio.
For planning, I use a conservative 43% back-end ratio. It is not a ceiling every program enforces, but it keeps your estimate honest. Apply it to the sample household:
- $9,000 x 0.43 = $3,870 total monthly debt allowed
- $3,870 minus $900 in existing debts = $2,970 maximum housing payment
That $2,970 is about 33% of income on the front end. Your housing payment has to cover more than the loan itself, which is what the next step breaks down.
Step 3: Break a Church Hill Monthly Payment Into Its Four Parts
Your housing payment is usually called PITI:
- Principal and interest: repayment of the loan plus the cost of borrowing.
- Property taxes: paid to the city, typically collected monthly into an escrow account.
- Homeowners insurance: also escrowed in most cases.
- Mortgage insurance or HOA dues: mortgage insurance applies to many low-down-payment loans; HOA or condo fees apply to some buildings.
Estimate each piece separately instead of typing a price and rate into a calculator and trusting the total. Taxes and insurance are the reason two homes at the same price can carry different payments.
Estimating the tax piece
Church Hill sits inside the City of Richmond, so city real estate tax applies. The rate I have been using is $1.20 per $100 of assessed value, but rates are set annually, so confirm the current figure on the City of Richmond website (search for real estate tax rates) before you rely on it. The formula is assessed value divided by 100, times the rate, divided by 12 for the monthly amount. On a $375,000 assessment, that is $4,500 per year, or $375 per month.
The key word is assessed. The city’s assessment of a Church Hill rowhouse can sit above or below what you agree to pay, especially in a block where renovated homes have sold recently. Look up the address in the city’s assessor records and use the higher of the two numbers to stay safe.
Estimating insurance and mortgage insurance
Get a real homeowners insurance quote for the specific address, since age, roof, and wiring on older Church Hill homes can move the premium. For planning, I’ll use a hypothetical $150 per month. Mortgage insurance depends on your down payment, credit score, and program, so for this example I’ll assume a hypothetical 0.6% of the loan per year.
Step 4: Work Backward From Your Payment to a Home Price
Start from the $2,970 ceiling and subtract everything that is not principal and interest. Rates change daily, so as of October 2026 check current quotes; the 6.5% 30-year rate below is a hypothetical chosen for easy math, not a market figure.
- Estimate taxes: about $375 per month on a roughly $375,000 home.
- Estimate insurance: $150 per month.
- Estimate mortgage insurance: about $178 per month (0.6% of a roughly $356,000 loan, divided by 12).
- Find the principal-and-interest budget: $2,970 minus $703 = about $2,267.
- Convert to a loan amount: at a hypothetical 6.5% over 30 years, each $1,000 borrowed costs about $6.32 per month. So $2,267 / 6.32 x 1,000 is roughly $358,000.
- Add the down payment: with 5% down, divide the loan by 0.95, which gives about $377,000.
Because taxes and mortgage insurance rise with price, I settle on $375,000 and check it forward. Loan: $356,250. Principal and interest: about $2,252. Taxes $375, insurance $150, mortgage insurance $178. Total: roughly $2,955 per month, under the $2,970 ceiling. Down payment: $18,750.
So this household’s planning number is about $375,000. Now compare it with the market. Pull the latest Church Hill median sale price from Virginia REALTORS market data or Zillow’s Richmond neighborhood pages, and note the date. I’m not quoting a median here because it shifts month to month, and a stale figure is worse than none. If your number sits below the median, you will be shopping smaller rowhouses or condos, or you will need a larger down payment, which is better to learn now than at an open house.
Step 5: Add Up Cash Needed to Close, Not Just the Down Payment
The down payment is only one upfront cost. Plan for four:
- Down payment: the percentage you put toward the price.
- Closing costs: title work, appraisal, recording fees, and origination charges. The CFPB’s Loan Estimate explainer shows how these appear on the form you receive within three business days of applying, and the CFPB also explains the Closing Disclosure you get before settlement. Ask Duane Buziak about no-out-of-pocket closing options where they fit your situation, but never assume any loan comes without closing costs.
- Prepaids and escrow deposits: your first insurance premium and a starting cushion for taxes and insurance.
- Reserves: cash left after closing, often two months of housing payments or more.
Down payment assistance and grants can reduce what you bring. Programs, funding, and eligibility change, so confirm current terms, including those from Virginia Housing, before counting on them.
VA loans can allow no down payment for eligible borrowers. A VA funding fee usually applies, with exemptions for certain borrowers, such as some with service-connected disabilities. Verify current amounts on the VA funding fee page.
Illustrative cash to close for the sample household on a $375,000 conventional purchase:
- Down payment (5%): $18,750
- Closing costs (assumed 3% of price): $11,250
- Prepaids and escrow deposits: $2,500
- Reserves (two months of about $2,955): $5,910
- Total: about $38,400
Step 6: Stress-Test the Number Against Your Real Budget
What a broker can approve and what feels comfortable are different numbers. Subtract what your household actually spends: childcare, commuting, retirement and savings contributions, and upkeep. A common rule of thumb, not a statistic, is to set aside about 1% of the home’s value per year for maintenance. On $375,000 that is $3,750 per year, or about $312 per month, and older Church Hill houses can need more.
Then rerun the payment under worse conditions. Add a full percentage point to the hypothetical rate (7.5%) and raise insurance to $225:
- Principal and interest on $356,250 rises to about $2,491
- Taxes $375, insurance $225, mortgage insurance $178
- New total: about $3,269, which is $299 over the ceiling and pushes back-end DTI to roughly 46%
If that scenario breaks your budget, target a lower price, a larger down payment, or a plan to pay down the car loan first. Shopping across many sources also helps, because the spread between quotes on the same day can move your payment as much as a rate change does.
How the process is set up matters here, so here is a general comparison. Details vary by company and change over time, so verify any specific institution’s current guidelines directly.
| Feature | Duane Buziak (independent broker) | Typical retail bank | Direct-to-consumer online company |
|---|---|---|---|
| How rates are shopped | Compared across hundreds of wholesale sources | Usually that bank’s own pricing | Usually that company’s own pricing |
| Early credit check | NoTouch Credit Pull (soft pull) available | Often a hard inquiry at application; varies | Varies by company |
| VA loans | Options down to 500 FICO, subject to program and profile | Often higher internal score minimums | Varies |
| Non-QM, DSCR, Bank Statement | Available through wholesale partners | Often limited or unavailable | Varies |
| Best fit | Self-employed, investors, credit rebuilders, rate comparers | Existing customers with straightforward files | Borrowers comfortable with a fully online process |
Step 7: Confirm Your Number With a Soft-Pull Pre-Approval
Everything so far is an estimate. A soft credit pull mortgage review turns it into a checked number. With NoTouch Credit Pull, Duane Buziak can review your credit profile without a hard inquiry, so there is no credit hit from the mortgage application stage, then compare options across many wholesale sources to see which program and rate structure fit your household.
Bring these to the conversation:
- Two recent pay stubs, or last year’s tax return if self-employed (bank statements for Bank Statement programs)
- Your monthly debt list from Step 1
- Recent bank statements showing your down payment and reserves
- Your payment target and the stress-test results from Step 6
A pre-approval letter shows a seller you have been reviewed. It does not guarantee a loan. Final approval still requires full underwriting, an appraisal, and a hard credit pull when you formally apply, and your rate is not locked until you lock it.
If you are ready to test your numbers, call Richmond Mortgages by Duane Buziak at 804-212-8663. Duane Buziak is NMLS #1110647, with Coast2Coast Mortgage LLC NMLS #376205.
Numbers to Carry Into Your Church Hill House Hunt
Write these three down before your first showing:
- Maximum payment: $2,970 for the sample household (yours will differ)
- Maximum price: about $375,000 on the sample inputs, with a lower comfort target from your stress test
- Cash to close: about $38,400 on the sample inputs, including reserves
Ready to secure your dream home with Richmond’s most trusted mortgage expert? Get your personalized rate comparison today with no credit impact and discover why hundreds of local families choose Duane Buziak for stress-free mortgage solutions backed by 24/7 support and the fastest close times in the area.