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Many financial experts suggest your total housing costs (including mortgage, property tax, repair costs, etc.) shouldn't exceed 35% of your gross income. Of course, how much you can afford also depends on your current debt level, your job security, how long you plan on staying in your home. If you don't stay for at least 5-7 years, it's probably not worth buying because the realtor / selling costs will wipe out your gains.

30 year mortgages are a bad idea, 15 year is a better idea. With that in mind, if a payment on a 15 year mortgage doesn't exceed 35% of your gross income, then I'd say you're in safe territory.

Try a virtual mortgage for a few months. Figure out what your mortgage payment would be for what you are looking to spend, deduct your current rent payment, add homeowner's insurance and then start saving that each month. If you cannot make the ends meet each month then you are not ready for a mortgage.

One of the aspects of mortgage affordability that is often overlooked is liquidity.  A mortage can be a very safe form of leverage, but when you borrow to buy a home, your investment now depends on your ability to consistently service the loan.  Your cash reserves should be adequate to cover your mortgage payments for an extended period if your income is interrupted.  How long a period?  Long enough to rearrange your affairs so that you could either resume payment on the mortgage or sell the house on favourable terms.

I generally recommend that your emergency fund be at least 20% of the outstanding mortgage value.