The Federal Housing Administration says people can typically afford to pay 29 percent of their gross monthly income for mortgage payments.

For example, if you earn $100,000 annually, then your monthly income is $8,333. Twenty-nine percent of that is $2,416.57 -- theoretically the monthly mortgage payment you could afford.

But mortgage payments are only a starting point in budgeting for homeownership. Don't forget the other expenses that determine whether you can really afford the home you want.


The most obvious additional housing expense is utilities -- gas (or other heating costs), electricity and water. And don't forget about telephone, trash collection and cable or satellite bills.


As a property owner, you are responsible for property taxes. The rate will vary from town to town. In our community, the annual property taxes total about 1 percent of value.

That means for a home with a market value of $1,150,000, yearly taxes will run around $11,000 a year. To get a general idea on how much the tax bill will be for a property, ask the seller for a copy of the previous year's tax assessment. All tax bills are on public record and can be obtained in town hall. Your real estate professional can help you refine these figures.


With homeownership comes upkeep. You'll want to set aside a small amount each month to pay for those "rainy day" repairs such as painting, plumbing and carpet cleaning. The amount you budget will depend on the age of the home, as older homes tend to require more repairs because the appliances may be older and may not be under warranty. Don't forget about seasonal maintenance, including lawn care, window cleaning, pest inspections, and gutter cleaning. And if you live in a home long enough, there are inevitable major repairs -- the roof, furnace, and appliance replacement.


To protect yourself financially in case something happens to your property or its contents, you'll need homeowners insurance. Depending on the type of coverage, the costs for homeowners insurance each year can be anywhere from a few hundred dollars to thousands of dollars. And, if you live in a flood zone, you may will need supplemental insurance.

In addition, if you want broader or higher coverage for your collections or high-ticket items such as computers, jewelry, and artwork, you may want to purchase an endorsement/rider to your homeowner's policy.


Whether you buy an older home or have one newly-built, there are going to be improvements you'll want to make. So, you need to consider remodeling and upgrading costs as well when determining your housing budget.

Consider: The average cost to remodel a 25-plus-year-old bathroom in 2013 was $16,600, according to Remodeling Magazine's annual Cost vs. Value Report. This includes materials, labor and subcontracting fees.

Even the cost for paint, light fixtures, window treatments, flooring and decorative cabinet knobs can begin to add up. However, having a home improvement fund will help lighten the load.

In addition, it is a good idea to speak with a mortgage broker or banker to prequalify for a mortgage. You will gain a good understanding of what you can borrow and what your monthly payments will be.

By determining all the costs associated with homeownership, you can go into your home search with a reasonable price range that will allow you stay within your budget. But, as any homeowner will attest to, there is still an emotional tug that cannot be measured. Sometimes you have to go with your instincts.

Linda Skolnick's "Skolnick's Scoop" appears every other Friday. She is a Realtor with Coldwell Banker Riverside in Westport and can be reached by calling 203-246-0088 or through her website,