Getting approved for a mortgage loan is fairly easy to figure out on your own because no one, including banks, knows your bills better than you.
Forget technicalities, simply add the new mortgage payment, monthly taxes and new house expenses together and compare it to your monthly income.
Be honest with yourself about how much you can get approved for a mortgage because you'll be making that payment for the next 30 years of your life. The bank does the best they can to compare your income to your current expenses with the addition of the new home to see if you can or can't afford the monthly costs but the final desicion is up to you, the one who wants to apply for the mortgage loan.
Borrowing Power
Your borrowing power with the back is the simple formula used to figure out what you can get approved for a mortgage loan. The amount you can afford per month is 40% of your gross monthly income and that's that! Of course, if you already have a loan it needs to be subtracted from that number such as car loans, student loans etc. Other expenses such as heat, electric, income taxes, insurance and other house bills are already figured into the 40% of your gross income. Use a mortgage calculator to see how much your monthly mortgage payment will be before searching for homes that might be out of your range.
If you're looking to buy a home then the "right time to buy" would be when real estate prices are down, interest rates are low and closing costs are minimal, so how is the year 2012 a bad time to buy? If everyone waits for real estate to hit rock bottom before buying a home then it will never come back up because homes need to be bought in order for real estate to make a come back.
