The first step is for you and your family to set up a monthly budget to determine how much you feel comfortable spending each month for housing.  You should decide what that amount is before moving forward with the process of seeing how much you qualify for.  Ultimately, it is not how much of a mortgage or monthly house payment the guidelines allow you to qualify for, it needs to be an amount that you feel comfortable paying each month. Even wehn buying for cash you still need to budget as a home brings in new expenses

Debt-to-Income Ratio

Your gross monthly income and recurring debts, together with your proposed house payment are evaluated to calculate your debt-to-income ratio.  This is the primary factor that will determine the amount of house you can afford to purchase.

-Standard Ratio Guidelines
Conventional is normally 25% of your monthly salary. There are cases where the minimum guidelines can be exceeded and alternative l programs can be used to provide solutions to high debt-to-income ratios.  Qualifying for any given mortgage is dependent on a combination of your income, financial assets as well as your credit history.

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