If you have decided that ownership is right for you, then now is time to decide how much you can afford to spend to have your dream home. Most lenders suggest that you spend no more than 43% of your monthly income on a mortgage. You should also keep in mind that in addition to the mortgage costs, you will have to pay the closing costs and legal fees, which are usually 1% to 5% of the house price. And also keep in mind, as history has taught us that the real estate market can be a bumpy ride, as shown to us in 2007 and 2008, but remember, that even though the real estate market may fluctuate, but over the long stretch you are likely to make money because your property will build equity.