A: Often when I hear that question, the person really meant to ask "How much can I qualify for?", however I bet you know what you are asking about, so the question of how much you can afford can be quite different than how much you can qualify for.
There are two parts to "affording" a mortgage while buying a home, the initial out of pocket expenses when you buy the home, and then the ongoing expenses of the housing payment. Initial out of pocket expenses would be your down payment and your closing costs, it's finite and you can get a pretty darn good estimate ahead of time, but like anything it's an estimate so make sure you are all planning for the high side of things. The housing payment is a different story, and it has variables so I'll explain more.
I believe it's what you should feel comfortable with, you are writing the check each month, so part of that is to figure out what type of home that you would need in order for you to want to buy a home. Don't "settle", don't dream bigger than your paycheck, and once you've determined that (whether it's a condo, a house with a yard, lakefront property, etc.) you'd speak with a few real estate agents and check out websites for listings to see what price range that would be, figure out property taxes and get a quote for homeowners insurance on one of the "ideal" homes you saw fit what you needed. Next you'd speak to a few loan officers to find out options & get advice, really nail down a solid range for the mortgage payment. Compare the ideal new home to your current home, would it have a (bigger) yard? More space to heat/cool? A pool to maintain? Do you like to maintain a home or pay others to take care of it? You can get estimates from housing utility companies, or just use an educated guess or online tools (there are quite a few out there) to figure out how much more energy costs would be. Ideally getting the information about an owner's current utility costs would be ideal, but you'd probably need to show some very serious interest to get to that point in a relationship.
So now that you've nailed down the monthly costs, how do your current ones compare? Are they in line? Have you already been doling out that much? More? Then the next part won't entirely apply. If it's less, then what you should do for 6-12 months is put aside the difference between your current housing expense & future one, and every 3 months an extra $500 to prepare for an unexpected expense with the new home (one client of mine rolled dice every month to determine how much "extra" they'd put away, they compared it was like going to Vegas to find out how much you'll lose). If you are comfortable with that amount, then you should anticipate buying the ideal house with mortgage financing would have a comfortable housing expense for you as well.
Good basic article for "Easy Budget Planning" (not mine): http://steedinvestments.com/blog/2010/10/01/red-yellow-green-easy-budget-planning-for-couples/#more-136
Clemson University "Study" on "How much House Can You Afford?" (14 pages): http://www.clemson.edu/psapublishing/pages/FYD/EC676.PDF... more