Before you start looking at homes, you need to have some idea of what you can afford and get pre-qualified for a mortgage.
You can do some simple calculations on your own.
Because of many different factors involved, including your own
financial situation and variations in the qualification guidelines for
different mortgages, the most easiest and accurate way to determine
how large a mortgage you can qualify for is to talk
to a lender. During the mortgage pre-qualification process a lender
analyses your financial situation applying basic underwriting
standards.
Pre-qualifying for a mortgage gives you only a general idea about your borrowing power. A pre-approval is a lender's firm commitment on a loan. This puts you in a stronger position when you are negotiating with the seller, because the seller knows that your mortgage is already approved.