Affordability

Affordability refers to the ability of an individual or household to purchase and maintain the cost of basic necessities such as food, housing, and transportation without financial strain. In the context of personal finance, affordability often refers to one’s ability to make a purchase or take on a financial obligation such as a mortgage or car loan while still being able to cover other expenses and save for the future. The concept of affordability is important in the mortgage industry as lenders must assess an individual’s ability to afford a mortgage before approving a loan.