Before you plan to spend the maximum amount you've been approved for, consider whether you can really afford the mortgage your lender offers. Here's how to determine how much of a mortgage payment your budget can handle each month.

Calculate your true monthly cost

If you want an in-depth look at your potential mortgage payment, look for a mortgage calculator that includes costs like homeowners insurance or property taxes.

Know the legal limits on lenders

According to the Mortgage Reform and Anti-Predatory Lending Act, a section of the Dodd-Frank Act of 2010, any entity lending money for a mortgage cannot underwrite the loan unless they determine you can reasonably repay it.

Your mortgage should take up no more than 28% of your monthly income

You can use 28% as your rule of thumb too when making a budget for buying a home. Here's an easy formula: Multiply your monthly income by 28, then divide that by 100. The answer is 28% of your monthly income.

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Information obtained from Trulia