The first step in buying a house is determining how much you can afford. Knowing how much you can afford to pay in mortgage payments will help determine which homes are in your price range. Generally, your fixed expenses (mortgage payment, insurance and property taxes, but not maintenance and repairs) should not be more than 28 percent of your gross monthly income. If you want to do some research on your own regarding how much house you can afford, use the following calculators: • Haven't found a home yet? You may be asking: How much can I afford? • Found the home you want? You may be asking: How much will my payments be? • What are points? A point is an upfront fee the lender charges. One point is equal to one percent of the loan amount. For example, one point on a $45,000 loan would be $450. The lender determines how many points are charged. Many lenders allow customers the option of paying "points" in exchange for a lower interest rate on the loan. Points are paid at closing, either by the buyer, the seller, or split between them subject to government guidelines or your sale contract. Find out if points can help you. Calculate: Should I pay points to lower the rate? • Down payments can help you reduce your monthly mortgage payment and the amount you pay in interest. If you're interested in saving money, ask: How much should I put down? • One key benefit to home ownership is that you may be able to deduct your mortgage interest at tax time. Consult your tax advisor for details, but first estimate: How much can I save on my taxes? • At this point, you might also be asking: Am I better of renting? The best way to determine how much house you can afford is to pre-apply. Pre-applying will help you narrow your search to houses you can afford and will give you more negotiating power with the seller. Click Here use our Checklist tool on the Checklist page and also Click here for our Mortgage Calculator.