1. First compare current house prices for homes in the surrounding area. You can use websites like realtor.com or the home search on BillKukla.com.

2. To see what you can afford you can use our calculators to see what homes fit your spending budget.

3. Find out what your total monthly housing cost would be, including taxes and homeowners insurance. To get a feel for the maximum amount you should spend, including taxes and insurance, use our calculators to see In some areas, what you'll pay for your taxes and insurance escrow can almost double your mortgage payment. You can get information for a local home in your price range and by contacting a local insurance agency see what the monthly additional cost will be to your monthly mortgage payment.

4. See how well a new house will fit into your monthly budget. "Fannie Mae recommends that buyers spend no more than 28% of their income on housing costs." Any time you look to spend over 30% of your monthly income you carry the risk of being house poor.

5. Find a trustworthy real estate agent in your area and discuss the current real-estate climate. Is the market still continuing to fall or has it hit bottom and ready for recovery?