Before you shop for a new home, one of the first things you need to determine is which houses are in your price range.

The amount of home you qualify for is based on your monthly income, monthly debt and the amount you can put down for a down payment.

Lenders use “qualifying ratios” to determine a safe amount to loan a potential homeowner. Ratios can vary depending on a person’s credit score, said Rick Monley, vice president/area sales manager of Countrywide Home Loans in Kansas City, Mo. Monley oversees nine branches of Countrywide Home Loans, including the branch in Lawrence.

“The norm is 28/36, but it’s just a foundation,” Monley said. “The higher the credit score, the more flexible we would be. The lower the credit score, the closer we’re going to hold to those ratios.”

In the ratio, the first number is the “front ratio.” This is the maximum percentage of your monthly gross income that would be spent on monthly housing costs, including principal, interest, taxes and insurance. In the example ratio cited above, you can’t spend more than 28 percent of your income on housing costs.

The second number is the “back ratio.” This is the total of all your consumer debts — car payments, credit card payments, students loans, etc. — as a percentage of your monthly income. A “36 back ratio” means that you are allowed to spend up to thirty-six percent of your monthly income on these debts.

Once you know your maximum monthly payments, you subtract. You have to do a little estimating, too. Estimate what your monthly taxes and insurance will be and subtract them from your maximum payment. That leaves you with the principal and interest payment.

Once you know the principal and interest payment, you can use our mortgage calculator to determine which homes are in your price range.

Most real estate agents and sellers insist that potential homebuyers get pre-qualified first, Monley said.

“(Real estate agents) want to make sure that they are managing their time well,” he said. “The other thing is that if the seller is given three offers, the seller will go with the one that has already been pre-qualified.”