One of the first things you have to do when buying your first home is to qualify for a mortgage. That seems simple enough, but the process of qualifying for a mortgage has several steps. Some of these steps are predictable, while others may pop up along the way. One of the primary items the lender will focus in on is your monthly housing expenses once you buy a home.

Costs of Homeownership

When you become a homeowner, it costs you more than just making the monthly mortgage payment. You have to add the taxes and insurance to the monthly principal and interest mortgage payment to get a true picture of the money you have to come up with on a consistent basis. At the point where you are still shopping around for a home, you can estimate these costs, based on the homes you are looking at buying.

Property Taxes

Start by estimating the annual taxes on the home. You can find this information in a couple of different ways. If you are working with a real estate agent, you can obtain this information from them or from the listing of the property from the MLS. Online resources, such as Zillow also list out the property taxes for specific properties that are listed on the site.

Homeowners Insurance

After the property taxes, you have to consider the homeowners insurance. Insurance on a home varies according to the location, value of the property and the deductible you choose for your policy. All of the factors that go into figuring out the cost of insurance can make it difficult to determine a figure.

You can start by contacting your insurance agent to find out if the company offers homeowners insurance. If so, they can go through the process of providing you an estimate. The Insurance Information Institute also lists out the average annual premium on homeowners insurance for the state where the home is.

Once you gather the estimate of the mortgage, taxes and insurance, you have a full picture on the expenses you will have for simply owning the home. If you have annual figures, divide by 12 to get the monthly costs. Add all of the costs together to see if it is a number that you can afford to pay and be a homeowner.