This is the forth part of my “Is it the right time to buy a home?” series where I am posing four questions for first-time home buyers. Today we are examining the question, how much can you pay for a home? To see the full series visit my personal website, www.jalone.com, or click here.

In my previous article, “Part 3: Is it the right time – Are you financially prepared to be a homeowner?,” I provided a link to some mortgage calculators that will help you determine how much you can borrow. Here are more but understand most of these will help you determine the maximum loan amount you may be able to qualify for. You know yourself the best, make sure the amount you borrow and have to repay each month works for you and it fits into your budget.

To do this I recommend comparing your current housing costs with the monthly costs associated with home ownership. This means you must factor in utilities, insurance, property taxes and maintenance costs. Remember some homes are part of a homeowners association and have monthly costs to cover common area, pools and recreation facilities. You should also factor in the tax savings you will get from being able to deduct mortgage interest and property tax on your annual tax returns.

Recently I worked with a young couple who were looking to buy their first home. They met with a lender I recommended and found out they qualified for a loan up to $375,000 based on their combined income. During the process my lender friend got to know them and found out that they want to buy a home so they can start a family. Since the wife wanted to stay home with the baby rather than returning to work she advised them not to borrow the maximum amount but to look for homes where their loan would be $250,000 or less as that amount would equal monthly housing obligations more in line with the husbands current income.

It is not what you qualify it what you can afford to repay comfortably keeping in mind you want to have a cushion for a financial shock such as a drop in income.

This was part four of five of my “Is it the right time to buy a home?” series. Visit my personal website, www.jalone.com or click here if you want to read the entire series where we consider:

Is it the right time to buy a home?

Should you stay where you are?

Are you financially prepared to be a homeowner?

How much can you pay for a home?

Do you know what you want in a home?

Julie Jalone is an experienced Realtor with MagnumOne Realty in Roseville and she and her team work with buyers and sellers of homes in the greater Sacramento area. To learn more about Julie and her business visit her personal website at jalone.com or check out her daily blog, “Keep it real in Sacramento.”