re: Mortgage qualification

When my wife and I were in the market we basically just built a budget to see what we were comfortable paying.

We used our after tax & retirement earnings. Included our current expenses (gas/food/TV/phones...) that would not change with a new house, plus our current monthly obligations; then spoke to family and friends that had similar size houses we were looking at to see what there costs were for their utilities, insurance, maintenance, etc. Also set how much we wanted to budget for savings (Vacation, kids tuition, home repairs, auto repairs...). After that we used the remaining balance to back into what we wanted our mortgage payment to be and figured out how much house we wanted. We qualified for almost 150% of what we actually wanted to buy just to make sure we could maintain our standard of living.

All future bonuses & raises were then used to pay off debt, upgrade sections of the house, vacations....