One should first seek the advice of a lender. Qualifying for a home loan is an easy process. However, one should be cautious about how much you really want to spend on a monthly basis. In other words, while the lender may say to you that you would qualify for $2,000 monthly mortgage amount does not mean that you would want to commit to that. Perhaps it would leave you with no budget for vacation time, or piano lessons that you promised your children.
A critical analysis should be taken and understanding what your expectations and needs are prior to getting pre-approved for a loan from a lender.
With that being said, generally speaking lenders like to stick to the 26% and 36% ruler of thumb when it comes down to pre-qualifying you for a loan. For example: Your mortgage, maintenance, taxes & insurance should not be more than 26% of your monthly income. If you take those payments plus add any other liabilities, you should not exceed the 36% ratio. Example: Car payments, credit card payments and any other additional monthly liabilities. Remember, that these are only guidelines. The ratios may be exceeded based on the loan program you choose and also the good credit standing that you have. (Coop purchases have different guidelines. Please refer to those guidelines as they are part of the application process)
Beware though. Just because a lender may tell you that you qualify for larger payments does not mean you should accept them. You as a borrower are responsible for making those payments based on the program you choose. It may be 15, 30 or even a 40 year term mortgage payment plan. The responsibility is up to you.