How Much of Your Paycheck Should Go to Your Mortgage in Fargo-Moorhead?

By Christopher Leigh | June 30, 2025

Dreaming of owning a home in Fargo, ND, or Moorhead, MN, without feeling “house poor”? With mortgage rates and home prices making homeownership a challenge, figuring out how much of your paycheck should go toward your mortgage is key to a balanced financial life. As of June 26, 2025, 30-year fixed mortgage rates are at 6.77%, per Freddie Mac, and Fargo-Moorhead’s stable market offers opportunities for smart buying. Ready to start? Explore homes at Vision Realty’s homepage and let Team Vision Realty guide you to a budget-friendly purchase.

Understanding Affordability in Fargo-Moorhead

Buying a home in Fargo-Moorhead means balancing your mortgage payment with other expenses like taxes, insurance, and lifestyle goals. Nationally, homebuyers are spending 44.6% of their income on a median-priced home, well above the recommended 30%, according to Realtor.com. In Fargo-Moorhead, the median home price is $320,000 in Fargo and $376,425 in West Fargo, making affordability a key consideration. Whether you’re eyeing a cozy rambler in South Fargo or a modern home in West Fargo, planning your budget ensures you can enjoy homeownership without financial strain.

Expert Tip: “Don’t just rely on what a lender says you can borrow,” says Christopher Leigh of Team Vision Realty. “Look at your full financial picture to avoid stretching your budget too thin.”

How Much Should Your Mortgage Payment Be?

Here are three guidelines to determine how much of your paycheck should go toward your mortgage in Fargo-Moorhead:

1. Follow the 28% Rule

A common guideline is the 28% rule, which suggests your monthly mortgage payment—including principal, interest, taxes, and insurance—should not exceed 28% of your gross monthly income. For example, with a $100,000 annual salary ($8,333 monthly), your mortgage payment should stay below $2,333. In Fargo-Moorhead, a $320,000 home with a 6.77% 30-year fixed mortgage has a monthly payment of about $1,670, fitting an income of $82,285 under the 50/30/20 rule (50% for needs, 30% for wants, 20% for savings/debt).

• What to Do:
  • Use the search box on Vision Realty’s homepage to find homes within your budget.
  • Calculate your monthly payment with our Mortgage Calculator.
  • Include taxes and insurance (about 1-2% of home value annually) in your budget.

Expert Tip: “The 28% rule is a great starting point, but adjust based on your lifestyle,” says Christopher. “Fargo-Moorhead’s affordable homes make it easier to stay within budget.”

2. Consider Your Full Financial Picture

Beyond the mortgage, account for all expenses—utilities, repairs, childcare, retirement savings, and hobbies. Nationally, rising home prices and inflation (3% annually as of January 2025, per U.S. Bureau of Labor Statistics) make it critical to plan holistically. In Fargo-Moorhead, where home prices are below the national median of $422,800, you can find homes that fit your budget without sacrificing goals like travel or education savings.

• What to Do:
  • List monthly expenses (e.g., $500 for utilities, $200 for maintenance) to ensure your mortgage fits.
  • Explore North Dakota Housing Finance Agency programs for down payment assistance to reduce upfront costs.
  • Work with a mortgage lender to get pre-approved and understand your borrowing capacity.

Expert Tip: “Think about your future goals when budgeting,” says Christopher. “Team Vision Realty can help you find a home that supports your lifestyle and finances.”

3. Explore House Hacking for Affordability

House hacking—buying a home with extra bedrooms or a duplex and renting out part of it—can make homeownership more affordable in Fargo-Moorhead. For example, renting out two bedrooms in a $320,000 Fargo home for $700 each could cover most of your $1,670 monthly mortgage payment. High-demand areas like downtown Fargo or near Moorhead’s Concordia College are ideal for this strategy, helping you stay within the 28% rule while building wealth.

• What to Do:
  • Search for homes with rental potential on Vision Realty’s homepage.
  • Check local regulations for rentals in Fargo or Moorhead to ensure compliance.
  • Consider FHA loans (3.5% down) for owner-occupied properties with rental units.

Expert Tip: “House hacking is a game-changer in Fargo-Moorhead,” says Christopher. “It’s a smart way to offset your mortgage and build equity.”

Can You Get a Mortgage Without a Job?

Yes, it’s possible to get a mortgage without a traditional job, though it requires more documentation. Lenders in Fargo-Moorhead look for steady income sources, such as investments, rental income, or retirement funds. A sizable down payment—potentially from savings or a family gift—can also help, but you’ll need to prove the funds are a gift, not a loan, per lending guidelines.

• What to Do:
  • Gather documentation of alternative income (e.g., bank statements, investment records).
  • Consult a mortgage lender to explore options like FHA or conventional loans.
  • Work with Team Vision Realty to find homes that fit your financial situation.

Expert Tip: “Non-traditional income can work for a mortgage,” says Christopher. “We can connect you with lenders to navigate the process smoothly.”

Getting Started in Fargo-Moorhead

Ready to buy a home that fits your budget? Here’s how to begin:

1. Browse Listings: Start your home search at Vision Realty’s homepage to explore listings across Fargo, Moorhead, and West Fargo.
2. Assess Your Budget: Use the 50/30/20 rule to keep housing costs under 50% of your income. Try our Mortgage Calculator.
3. Get Pre-Approved: Work with a trusted mortgage lender to secure an FHA or conventional loan.
4. Tour Neighborhoods: Visit Fargo-Moorhead communities to find the perfect fit for your lifestyle.
5. Partner with Experts: Team Vision Realty, a member of the Fargo-Moorhead Area Association of REALTORS®, offers ethical, professional guidance for all buyers.

Conclusion

In Fargo-Moorhead’s 2025 housing market, smart budgeting can make homeownership achievable without sacrificing your financial goals. By following the 28% rule, considering all expenses, and exploring strategies like house hacking, you can find a home that fits your life. Start your journey at Vision Realty’s homepage, or contact Christopher Leigh using the form below or call +1(701) 715-4747 to make your homeownership vision a reality!

Contact Vision Realty in Fargo-Moorhead

Christopher Leigh, Broker
+1(701) 715-4747 | chris@visionrealty.us
509 Front St, Hawley, MN 56549