How to find the perfect home

It isn't the one that has everything. It's the one with more of what you want and less of what you don't. This system can guide you to it.

By Alison Rogers, for Money Magazine

A home's true cost

Mortgage Payment

month $ year $

TIP: Use about $660 a month for every $100,000 you borrow.

Annual Maintenance

TIP: Figure 2% to 4% of the purchase price.

Property Tax and Association Fees

TIP: Check with your broker.

Annual Utility Costs

TIP: Get recent bills for utilities (winter and summer), including trash removal, and water and sewage service.

Annual Insurance

TIP: Get estimate at insure.com and insweb.com.

Gross annual income

Total annual housing expenses

Expenses as % of your gross income

Your total annual outlay should be no more than a third of your gross income (ideally, less). Your cost of ownership appears to be manageable with your income.

Your total annual outlay should be no more than a third of your gross income (ideally, less). Your cost of ownership appears to be more than may be comfortable with your income.

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A home's true cost

I see a lot of buyers make a basic mistake: When deciding if a particular house fits their budget, they look only at listed price and their probable mortgage payments.

But to make an honest comparison of the houses on your list, you must consider all the costs you'll be facing. In addition to mortgage payments, there are maintenance costs, property taxes and homeowners association fees, utilities and insurance.

Your total outlay should be no more than a third of your gross income (ideally, less). Use the calculator to the right to see if you meet this benchmark.

How much house can you afford?

Mortgage Calculator

Alison Rogers is the author of "Diary of a Real Estate Rookie."

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