This Was the Average Mortgage Amount in May. Can You Swing It?

Buyers are increasingly borrowing more money to finance their home purchases.

It's a tough time to be looking to purchase a home. Not only is inventory extremely limited, but home prices have soared in the course of the past year as low mortgage rates have driven up buyer demand.

In fact, the average mortgage signed in May came to $384,000, according to the Mortgage Bankers Association. That's a sizable increase from the average home loan amount of $377,434 in April, and it's also the fourth consecutive month of increasing mortgage values.

How much of a mortgage payment can you afford?

You'll often hear that it's a good idea to keep your housing costs to 30% or less of your take-home pay. There are exceptions, of course. In some parts of the country, that 30% threshold may not be possible due to perpetually inflated home prices. And in some cities, not needing a car can allow for more wiggle room to spend on housing.

But for the most part, you should aim to keep your housing costs to no more than 30% of your paycheck. And to be clear, that doesn't mean your mortgage payment alone can eat up 30% of your pay.

Your mortgage payment, which consists of principal and interest on your loan, is only a portion of what you'll spend each month to own a home. You'll also have to cover the cost of:

• Property taxes
• Homeowners insurance
• Private mortgage insurance, if you don't make a 20% down payment and have a conventional loan
• Homeowners association (HOA) fees, if you buy in an HOA that charges dues

As such, when you think about that 30% threshold, make sure to account for all of the items above as well as principal and interest on your loan.

Plan ahead and spend wisely

Now, let's get back to today's housing market. Because home values are so inflated, you may find that a neighborhood you'd normally be able to afford is now a huge financial stretch. And if that's the case, you may need to be willing to buy a home elsewhere, or put your home search on hold until more listings hit the market.

If you spend too much money on housing, you'll risk falling behind not only on your mortgage itself, but on your bills in general. If that happens, you could end up ruining your credit and racking up a big pile of debt.

To make sure you're not getting in over your head on housing costs, use a mortgage calculator to see what your monthly payments will look like based on the homes you're eyeing and the funds you have for a down payment. And then make sure you're sticking to that 30% rule.

While mortgage debt is generally considered a healthy type of debt to have -- since it lets you eventually own an asset that can gain value over time -- too much mortgage debt is anything but healthy.

Borrowers across the country are taking on increasingly higher mortgages so they can buy homes in today's market. But if you feel that a mortgage of $384,000, or anything in that vicinity, is uncomfortable for you, you should either switch gears as far as your home search goes or put your plans to buy on hold until home prices come down.