Deciding what amount to pay on a home is tricky. You want to end up in a great family home, but you don't want to risk your investment by going for a house that is out of your budget range. Here are some ways that you can predict how much to spend on a home.

Look at Various Rules of Thumb

There are various ideas about how much you should spend on a home, based on your income. Some people say 2.5 times your household's annual income is the best way to go, while other sources say that you can go up to four times your income. Probably somewhere in the middle is an okay spot to land. Whether you end up on the high end or low end of that spectrum may depend on other life factors.

Projected Income

You may know a little bit more about your income situation and know that it's nuanced. Perhaps you recently changed career tracks and have a solid income but know that it's going to increase significantly in the next 10 years. Or, you could be on the opposite end of the spectrum, where your family income is great now but one parent plans to take time off work to stay with young children. These factors can tip you towards being more conservative or more liberal with your spending on a mortgage.

Other Debts

Most of the general ideas on how much to spend for a home assume that you have a moderate amount of other obligations. For instance, many people are working on their student debt, but if you have debts in the six figures you probably shouldn't buy a home that's four times your current salary.

Look Into a Mortgage

As far as giving you a number to stay under, applying for mortgage pre-approval for homes for sale can help. And the good thing is that they take into account many of the factors mentioned above, such as your income, your other debts and obligations, the amount you can put down towards a home, and your credit history. Of course, you may end up deciding to shoot well under the pre-approval amount, to be on the safe side. Or, in limited cases, it could be wise to approach private lenders and other sources so that you can supplement the amount that a mortgage lender is willing to give you. In short, there is no one answer to how much you can spend on your dream homes for sale; considering all of the information at your disposal can help you make an informed choice.

For more information and advice on buying a home, talk with a real estate agency, such as The Soda Group.