An important part of getting ready to buy a home is to talk to a mortgage lender (ask if you need recommendations) to find out how much money they will lend you to purchase a home.  Lenders have a variety of calculations that they perform to determine how much money they will lend you -- most related to the highest percentage of your income that they are comfortable with having you spend on housing.

However -- this does not always mean that you should borrow as much as you possibly can.  Spending the most on a house that your lender would be comfortable with may not make you comfortable -- as it would then reduce the amount of money in your monthly budget that you could use for vacations, retirement savings, college savings, and so much more.

Check with your lender to find out how much of a home you CAN afford to buy -- but then decide how much you WANT to buy.