The Buyers Guide
How Much House?

House hunting begins at home--with planning. The first step toward buying a house is to sit down. Before you grab the road maps and hit the streets, you need to do a little planning. We call it "pre-qualifying." Simply, it's determining how much house you can afford to buy Knowing your affordable price range will bring your househunting into focus. Many lenders, for a small "upfront" fee, will send out all required verification and pre-approve you for a mortgage, allowing you the opportunity to negotiate as a cash buyer.

>How much house you can afford to buy depends on two things. How much you can afford for the monthly housing payment. And, how much you can invest in the down payment. Monthly payments include principal and interest on the mortgage loan, and property taxes and insurance against fire and other hazards. These four costs are often abbreviated "P.I.TI." (For some buyers and lenders, monthly housing costs may also include homeowner association dues, condominium fees and mortgage insurance.)