Planning to buy a house?  Since a home purchase is the largest and most significant investment most of us would make, it is worthwhile to consider the following questions and suggestions before reaching your final decision:

Are you ready to own a home? 
This means not just your financial capacity but your emotional and psychological readiness to own a home as well, since home ownership involves a big responsibility and commitment.   Get a copy of your credit report and make sure that lenders will like what they see.  Which leads us to the next question.
How are you going to finance your purchase?  
Shop around for mortgage rates and terms.  It is very important to remember not to over-extend yourselves – that is, do not borrow more than what you can afford to pay in monthly amortization.  In financing, the rule of thumb is your monthly amortization should not exceed 30% of your total family monthly income.  It is a wise buyer who will choose the best-looking house in his or her price range, and then move up to a better one later using the equity build-up and appreciation from the re-sale of the old house.
How much can you afford? 
Perhaps the easiest way to find out is to ask yourself what monthly payment you can afford to pay after you have put up your equity or down payment.  Meet with your financial advisor or mortgage broker to discuss your options, and get prequalified for a loan.  This will save you time later when you might need to move fast to close the deal, especially if there are other interested buyers.  It also lets the seller know you are serious about home buying and that you have the resources to make the purchase.