Your monthly house payment will normally consist of the following components: mortgage payment + 1/12 of your annual property tax + 1/12 of your annual homeowners’ insurance + a mortgage insurance premium (if you have less than a 20% down payment). In our industry, the acronym is PITI + MIP (principle, interest, taxes, and insurance and mortgage insurance premium). I strongly urge you to insist that your mortgage banker obtain pre approval for you at the highest PITI + MIP for which you are qualified. Once you have that number in hand, you can then determine the monthly payment that will allow you to sleep at night. This latter number will often differ from what is stated in your pre approval letter – it will normally be less. Your initial price range can be calculated directly from your “comfort level” payment, and this is an obvious starting point for your search. The benefit of being approved for a higher payment is that if you need to adjust upward your price range because you are not satisfied or inspired by what you initially view, you can do so without having to go back through the pre approval process. Make Sense???