A general rule of thumb for how much home you can afford is your total monthly expenses, including the new home loan, should never be above 45% of your gross (pretax) income. A homebuyer should typically be able to afford a home that is 3 to 3.5 times your annual income. It is always best to consult with a professional mortgage advisor. Not all lenders are equal. While you may have a great relationship with your bank for your daily checking account, they may not be your best bet for a mortgage lender. Feel free to ask me or your friends and family for mortgage lender recommendations. They have the expertise to advise you about your qualifications, how much you can afford, what your monthly payments will be and what you can expect through the lending process.