When purchasing (buying) your first home there are many items that you should consider before you even start looking. The first place to start is “How much home can you afford?” If you’re not sure, then you won’t know what you’re even getting into when looking. Many people have a good idea how much they can afford for a payment but have no idea how that translates into purchase price. The general rule of thumb in the current market (where interest rates are right now 6%-7.5%) is about $7-8 per $1000 financed. For example, a $100,000 loan amount would cost roughly $700-800 a month for a payment. Now once you understand this, let’s say you can afford a payment of $1400-$1600 a month. You should be able to buy around a $200,000 home — maybe even higher — depending upon the exact interest rate you qualify for.