Over recent years the subject of mortgages has attracted much hype and speculative media comment. The Northern Rock debacle is inspiring numerous column inches and shows no sign of abating. Perhaps it is not surprising that we are all so concerned; whether we are already homeowners or are considering our first cautious step onto the property ladder the state of the housing market is something that affects all of us.

Amid all of this media speculation, the basic practical issues related to buying a house are often neglected. There are few more fundamental issues, particularly for first-time buyers, than the simple question of how much you can realistically afford to pay. Purchasing a home is inevitably going to be pricey. In all probability it will be one of the most expensive things we do. Needless to say, the importance of getting it right is not something any of us should underestimate. You should be willing to invest lots of time establishing exactly what you can afford.

The first factor in the equation is your salary. The majority of mortgage providers are willing to offer you three or four times your gross annual earnings. If you are buying with a partner then lenders are likely to add their salary on top of what they are prepared to lend you. So, if you earn £30,000 you can expect to borrow around £120,000 and if your partner earns £20,000 this could increase to around £140,000. Alternatively, you may be offered three times your combined salaries - in this case £150,000.

Lenders may be willing to offer you a larger mortgage if, as is increasingly common practice, they consider your financial track record in addition to simple salary multiples. This would involve a lender assessing your statements and outgoings and using this as a consideration in their calculations. Lenders with a good credit history could be offered a more generous mortgage than those with a less impressive credit record.

The next thing to consider is your deposit size. Remember that the more you manage to put down as a deposit the lower your interest rate is likely to be so it is worth scraping together all the savings you can muster including, if possible, a parental contribution

Do not assume that this is the end of your spending. You also need to bear in mind multiple other expenses that will emerge before you move into your home. On top of the survey, legal fees and valuation (at a rough estimate you should budget approximately £1,500 for these) the largest single extra cost will probably be stamp duty. This works on a sliding scale as follows: if the property value is under £125,000 then there will be no stamp duty fee, between £125,001 and £250,000 will mean a 1% fee, between £250,001 and £500,000 will mean a 3% fee and over £500,001 will mean a 4% fee. Of course, for sellers there is also now the added extra cost of a Home Information Pack (HIP) to consider. You can probably expect to spend between £400 and £700 on a HIP. Detractors claim that this cost could end up being covered indirectly by the buyer.

It is also prudent to look at one of the many mortgage calculators on the internet; most big lenders will have one on their website. In addition you can save money and time by checking out a mortgage comparison site and keeping up to date with the most competitive deals.

Try to be as realistic as possible and take into consideration your monthly income and outgoings. Assess your finances for yourself; do not imagine that because a lender is willing to offer you a huge mortgage you can necessarily afford to pay it. It is important to be honest with yourself and not commit to anything that will significantly stretch your funds - a dream home is not worth bankrupting yourself over.