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Before you start shopping for a new home, you need to determine how much house you can afford.
One way to start is to get pre-approved by a lender, who will look at factors such as your income, debt and credit, as well as how much you have saved for a down payment, to come up with loan amount you can afford.
One rule of thumb is to aim for a home that costs about two-and-a-half times your gross annual salary. If you have significant credit card debt or other financial obligations like alimony or even an expensive hobby, then you may need to set your sights lower.
Another general rule of thumb: All your monthly home payments should not exceed 36% of your gross monthly income.
This calculator can give you a general idea of what size mortgage you can afford.