Once you’ve decided to buy a house, you’re probably itching to get out there and find one. You could do that, but the process will be easier, and the results almost certainly better, if you do a couple other things first. The first thing to do is figure out how much you can spend.

Monthly Costs

Figuring out what you can afford to spend on a house calls for a healthy dose of realism, not wishful thinking. Use this calculator to see what the principal and interest on a given mortgage will cost. 

Use this calculator to get estimates of what various lenders might consider acceptable mortgage amounts for you.  This calculator, like most lenders, will consider only your income and debt levels, not how much your day-to-day expenses are or other goals that you may be saving for. Keep in mind that the mortgage amount you could get and the amount you should get might not be the same.

Up-Front Costs

Buying a house means more than monthly payments. Up-front costs must be paid before you even get to the monthly payments; they are not part of your mortgage amount. Major up-front costs include:

• Down payment. Mortgage lenders may require as little as 5 percent down, but keep in mind that you may have to pay the added cost of private mortgage insurance (PMI) if you pay less than 20 percent down. And, the less you pay down, the more you will have to pay later - with interest.
• Closing costs. Chief among these are "points" - one-time fees that the lender charges. Each point is equal to 1 percent of the borrowed amount. All told, closing costs may run from 3 percent to 6 percent of the mortgage amount. One way you can pare down your up-front costs is to pay less in points. Lenders will usually charge lower, or even no points in exchange for a slightly higher interest rate on the mortgage. This calculator can help you decide if paying points is for you.
• Other costs. Besides down payment and closing costs, there are other up-front costs that add up - everything from mover's fees to telephone hookup charges.

Often, a credit union can be more creative than other lenders in writing loan terms to help you keep costs down. Credit unions are also likely to have lower up-front costs than other lenders. Click here to find a credit union near you.