When trying to figure out how much house you can afford, the first step is calculating your monthly income.

When a loan officer prequalifies you, he works backward to figure your maximum mortgage amount.

You can do the same thing. The first step is to determine your monthly income. It isn't quite as easy as it sounds.

Lenders only count income they can document through paperwork. If you are a salaried employee and don't earn bonuses, it's easy. Get out your paycheck. If you get paid twice a month, multiply by two. If you are paid every two weeks, multiply by 26 (the number of pay periods in a year) and divide by 12. Teachers don't always work year round, so there are special rules for them.

If you are an hourly employee working 40 hours a week and don't earn overtime, it's easy. Look at your paycheck, multiply your hourly rate by 40, multiply that by 52, then divide by 12.

If you earn overtime, bonuses or commissions, it isn't as easy. Lenders don't give you credit for what you are currently earning. They average your income from those sources over the past two years, then add that to your regular salary or hourly monthly income.

If you want a shortcut that is usually close, get out your W2 forms for the past two years. Add them together and divide by 24 to get your monthly income.

If you are a teacher, nurse, seasonal employee, construction worker or earn only part-time income, you can use that shortcut, too. Add the figures from your past two years' W2s, then divide by 24. It generally gets you close.

If you are self-employed or receive 1099 income, you need a two-year track record. Lenders go by what you declare to the IRS as income because that is documentable.

Because some self-employed people overstate their expenses, this may understate your income. Look at the Schedule C of your tax returns for the past two years.

The number at the bottom next to "profit" is your annual income. You can add any depreciation to that figure. Add them together and divide by 24.

There are variations, such as for those who own corporations, but these guidelines should help most people.