Are you wondering "How much house can I qualify for?"

A general rule of thumb that many use is to multiply your annual gross income times 2.5. For example, if your annual gross income is $40,000, you might have a good chance to qualify for a mortgage that is two and a half times that figure, which is $100,000.

Your ability to make a down payment, your credit rating and the amount of other debt you have will factor in to how big of a home mortgage you might qualify for, though.

With a down payment of 20% and limited debt, you might be able qualify for a mortgage that is 3 times your annual gross income. Smaller down payments and significant amounts of other debt will probably mean you will only qualify for a mortgage that is smaller than 2.5 times your annual income.

Another way to approach the question of how much house can you qualify for involves something you might call the 28% rule. Approaching the question this way involves estimating how big of a monthly mortgage payment you can make and determining what size mortgage that equates to.

The 28% rules involves a calculation that starts with your monthly gross income. You then multiply that figure by 28%. Many bankers won't approve you for a mortgage payment that exceeds 28% of your monthly gross income. So if you can estimate what 28% of your monthly income is, you can then use computer software to determine what size mortgage has a payment that is about equal to that 28% figure.

But unfortunately it's not always that simple. Bankers use a term called PITI. That stands for Principal, Interest, Taxes and Insurance. Many bankers won't approve a mortgage unless all four of those costs - the PITI - add up to 28% or less of your monthly income.

As you can guess, it's not easy to estimate all four of those costs before you have even purchased a home. What many home buyers do to get a general idea of how much house they can qualify for is divide their monthly gross income by four.

You will need to do more figuring. But that will give you a ballpark idea of the size of monthly mortgage payment you might qualify for. From there you can use computer software to calculate what size mortgage loan has a monthly payment about the same as the figure you produced when you divided your monthly gross income by four.

Many computers come with Microsoft Works which includes spreadsheet software and easy-to-use financial worksheets. You can use one of the blank financial worksheets to estimate the principal and interest payments of various sizes of mortgages. Start by plugging in the amount you want to borrow. That will be the purchase price minus your down payment. Next you will need to enter an interest rate (5.0% to 6.5%).

The last step in the estimate is to choose whether you want a 15-year or a 30-year mortgage. After that, the software will calculate your monthly mortgage payment. The monthly payment will include the monthly interest and the monthly principal. That's half of the PITI so that gives you a ball park idea of the size mortgage and house you might qualify for.

You will probably have to make several attempts before the monthly payment is approximately the same as the figure you produced by dividing your monthly gross income by four. Be patient and eventually you will have a ball park figure that will be helpful.

My name is Al Pavlik and I created this website to tell you about a mortgage ebook I wrote. The book discusses the differences between 15-year and 30-year mortgages and how this choice is a decision that will impact your financial future for years to come.

You may be shocked at how costly a mortgage can become if you approach home financing the conventional way. If you approach it simply by calculating what size 30-year mortgage you can qualify for, you will be heading toward two decades or more of high interest payments.

You have other choices, choices that can make a huge difference in your financial future.

We are not talking about a difference of a few hundred dollars here and there. We are talking about tens of thousands of dollars.