Knowing exactly how much home you can afford is critical.

Without a reasonable limit you'll almost certainly buy a pricier home and take out a bigger mortgage than you can comfortably repay.

Establishing such a limit isn't hard if you follow two simple rules. Your:

Housing costs -- including principal, interest, taxes, assessments or any other fees -- shouldn't exceed 28% of your gross or pretax income.

Debt payments -- including mortgage, auto loans, student loans, child support and credit card bills that will take more than six months to pay off -- shouldn't exceed 36% of your pretax income.

Click here to learn more about how to determine how much you should spend and borrow.

Whether you're buying a home or refinancing an existing mortgage, we have a mortgage calculator that can help you make the right decisions.