Other Costs

In addition to the mortgage itself, you'll also have to add property tax and insurance to your monthly payment. And, if you don't make at least a 20% down payment, you'll also have to add Private Mortgage Insurance. Also, don't forget the expense of closing costs. It can eat into the cash you have available for the down payment.

All of these additional costs add up, so make sure you are comfortable with the total amount of your monthly payment and know how much you can put into a down payment before you begin your search and fall in love with a house you can't really afford.

Read How Mortgages Work for an in-depth review of the whole home financing process.