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Too big, too small or simply too much?

• Want to know how much home you can buy with the money you make and the savings you have? Look at yourself like a mortgage lender would and you’ll come up with a rough answer.

• Though there are no rules set in stone, most lenders will determine how much they can lend you by how much you make and how many expenses you already have. Most will not give you more than what they consider you can repay.

The 28% rule

• In most cases, housing costs – including the principal, interest, taxes and other fees – should not exceed 28 percent of your pre-tax income. Total monthly debt payments, including things such as an auto loan or credit card bills, should not surpass 36 percent of what you take home each week.

• Based on those percentages, you should be able to figure out the amount you would be able to repay comfortably each month. If you take home $3,000 in a month, then capping you debt payments, including your mortgage, at around $1,000 is a wise idea. Try our mortgage calculator to get an idea of how much your monthly payments would be.

• Back to finding a lender or find more information on mortgages