With all of the crazy things the government is doing these days to get banks lending again, there is a real push for people to buy homes.  It is in the best interest of the economy if people start buying houses (even though too much debt is what got us into the mess in the first place).  To that end, the administration is interested in extending discounts to home-buyers, and putting pressure on banks to offer more loans.

The amount you can qualify depends on a few things, but think of it from the banks' perspective.  If you were going to lend the money, you'd want to know:  1) how much the house is worth, 2) how secure the borrower's income is, 3) how well has the borrower handled repaying their loans in the past, and 4) how much of their current income is tied up in paying off other loans.

The bank will do an appraisal on a house before they will issue a mortgage on it.  Basically, they need to know that if the borrower stops paying, they can sell the house for fair market price and still get their money back.

They will also pull a report from the credit bureaus, which can tell them about your employment and loan history.  The bank will know what your 'debt-to-income' ratio is...how much debt you currently have (from credit cards to car loans, student loans,etc.), and how much income you have.  Yes, the credit bureaus can report on all this, because they collect that information regularly from pretty much any organization that loans money...even utility companies that give you service before you pay them report your payments (ontime vs. late) to the credit bureaus.

There are two ways to find out how much mortgage you can get: pre-qualify, or wait until you have a property in mind.  To pre-qualify, you visit a mortgage broker or your local banker and they will ask you some questions and be able to approximate how much you will possibly be able to get.   However, that is all pending the actual appraised value of the property you intend to buy.

Without visiting a mortgage issuer, the only other way to answer the question, "How much mortgage can I get" is to use the calculator built into some of the online banks' websites.  Of course, if you lie to the calculator (for example, by inflating your income amount), the number will be worthless, because when the real report is pulled, they will know for sure.

Linda - http://how.best-free-information.com - The "How" Blog