The dream of owning a home is one that many Americans can get behind. When you're a first-time buyer, you might be wondering what you can afford in your area and whether the payments would be feasible. Here are some steps to help you evaluate the real estate market and locate properties that are a good fit for you. 

Step 1: Project Your Income

It's a good idea to project your income for the next 5 to 10 years. You might look at the trajectory of your company or role and see if you will be making more money in 10 years. Or, if your income has been variable in the past, maybe you would keep a more conservative estimate or adjust down from your current year income. Since most mortgage estimates are based on your current income, it helps to have a broader picture of what you can afford by knowing your own financial situation. 

Step 2: Use an Affordability Calculator

The next step is to find a calculator that will show the ideal home price and monthly payments for your home. The calculators will use your income, the amount of down payment you can afford, and your debt obligations to generate some numbers. Again, take these numbers with a grain of salt if you expect your income to change. But they give you an idea of what your mortgage company will approve you for. Note with the calculators that your maximum home price will go up if you have a larger down payment, and it will go down if you have a lot of other debts to pay besides the mortgage. 

Step 3: Search for Real Estate Property in Your Area

When you start to search for real estate property, that's when you might want to get a real estate agent involved. Knowing your budget helps a lot when your agent brings properties for you to evaluate. You're going to start getting a sense of how your budget fits in with your criteria, such as the number of bedrooms or the neighborhoods you want to buy in. As you search for real estate property, keep in mind that considering a wider area, such as other towns or different neighborhoods, may be the key to finding a great fit within your budget. Viewing these properties in person will be your next step when you proceed to go through the mortgage pre-approval process.