A. The formula some lenders use is called P.I.T.I., which stands for principal, interest, taxes and insurance. Principal is the amount of money that you borrow, interest is the amount of percentage of the loan, taxes are the total amount of the annual real estate property taxes, insurance is required for fire and etc.
Lenders consider using 28% of your gross income for long-term debt such as a mortgage payment. However, if you do not have a lot of long-term debt (mortgage payments, car loans, credit card payments), they may consider using up to 36% of your gross income. But keep in mind that a higher mortgage means a higher payment.
A good way to know how much you can afford is to go to a bank or talk with a mortgage company that you feel comfortable with and have them qualify you for a specific amount of money that they will let you borrow.
A. You don't need an appraisal to list and sell your property. Most real estate companies will do a market analysis for you at no cost if you are going to list your property with them.
A market analysis is similar to an appraisal. The real estate agent/broker will find three or more properties which are similar to yours that have sold recently. This helps to determine what the marketing of your property would be. Although no two properties are identical, they get as close as they can to compare them to your property. They take the sold prices of the comparables and come up with an amount they feel that your property is worth.
An appraisal is a more in-depth way to determine the value of your property and lending institutions require an appraisal, not a market analysis, when getting a mortgage.