you gotta do the math on the taxes (remember, the amount you are taxed on is based (USUALLY) on what YOU pay, not the previous value) (to do the math, multiply the tax rate (each mil = $1 of tax per $1000 of value) x the value you'll be taxed on, often 1/2 of what you paid...)

and you have to add in the cost of insurance (call an agent for a quote or 2)

and you may have to pay private mortgage insurance (if you don't have 20% down)

and you have to add in the cost of gas and elec AND water

don't forget your monthly condo ass'n fee.

here's how I'd see the math, in your case

assume 5% down ($7,000)
mortgage on $133k (@ 6% int.) = $ 797.40 a Month

insurance = $50/mo (assume $600/yr)

taxes (assume 40 mils) = $2800/yr = $233/mo

private mortgage insurance = (assumed) $150/mo

gas/electric/water = (assumed) $100 (or more) / mo

condo fee = $300/mo

total: $1630.40/month.

note that your utilities, taxes, condo fee or insurance(s) may be higher or lower. check your situation.

PS: don't believe the hype about $200k loan for $700/mo. It will be an interest only adjustable rate loan w/a balloon payment. You'll get screwed.

remember that you will get tax advantages that will offset some of the costs gruen described. for instance...i claim 6 dependents which means each weeks check is larger, allowing you to spend more on your housing if you wish. at the end of the year i am usually within $100 +/- of my tax bill, which means i don't get a refund. 40 mils is high...depending on where you live. for instance tax rates are around 25 mils +/- in most parts of connecticut. another thing to keep in mind is that you are probably making money on what you spend through appreciation. so yeah - you might be stretched - but that money is working for you. it's a complicated decision making process. inform yourself and question everything.

true. tax advantages to owning rather than renting. check w/your accountant. in my case, my house is so darn cheap, that i get very little tax advantage. another odd reason that the price of housing is so high.

in my case, I was able to get a second mortgage to come up w/the 20% down, so I don't have to pay PMI. Also, you see quickly that the condo fee is something you don't have to pay if you own a single fam. home, so that money could go towards the mortgage...

like anything else, if it sounds too good to be true then it probably is.

not to mention single fam homes will appreciate faster than condos. condos are typically cheaper though.

don't forget about setting some money aside for repairs and maintenance for the year. you will need it. things break.

in my city the predominant housing type is rowhouses. if you are willing to go into a bad enough neighborhood livable rowhouses can still be had for as little as $50,000. Ironically some of the largest and most architecturally significant houses are in the worst neighborhoods while the ones in the gentrified neighborhoods are as narrow as 12' yet can still fetch 300-400k. buying a rowhouse would open up a whole new and confusing can of worms in terms of figuring out which neighborhood is likely to apprciate the most and how much living in a safe neighborhood would be worth to me, etc.

12' ? What city is this? That sounds like a very interesting space - very Tokyo-esque possibilities to design towards.

i wish i knew about this when i was buying my house 3 yrs ago...

fannie mae

it goes through everything...just not incredibly well organized.

time to head on down to barnes and nobles for a peppermint mocha and a couple of hours in the personal finance section.

I just bought my house, and went through a lot of the same things. If my experience is any indication, you are looking at roughly 125,000 mortgage (not including electricity or utilities) for the 1050 range. Of course, taxes vary and could affect your payment. My home was outside the city limits, thus avoiding many additional taxes. Best of luck, and hope you find what you are looking for. (Disclaimer: my estimate is based on my mortgage from 3 months ago. Interest rates, taxes, insurance, etc... will probably vary by locale.)

that makes sense.
my mortgage on a single family home on 2-1/2 acres is 6-1/4% (i think) for $130,000. my payment is about $1100 which includes taxes but not insurance. i put a signifigant chunk down - so no pmi. the location is pretty rural.

You should talk to an experienced and reputable mortgage broker - they often charge somewhat more fees than banks do (maybe $1,500 more) but they have access to literally hundreds, if not thousands, of loans, and will be able to look at your income, credit rating, etc. and find the best deals for you, in addition to explaining the intricacies of different types of loans, the escrow process, etc. When we first bought our house, we went through a broker and though we paid a few extra thousand in fees, I think we got a much better deal on the loan as well as the confidence of understanding what we were signing up for. We have since refinanced 3 times - the first time we went to the broker, the last two times I did the research myself and it worked out fine now that I understand all the fine print. In fact, we most recently did a cash-out refinance so we can add an addition to our house (took out a whole new loan to pay off the previous loans plus cash), and I went with E-Trade over the internet - but I wouldn't recommend that route unless you really understand the variables.
I would encourage you to read one or two books about buying a house - just so you know what questions to ask. You should also get quotes from at least three lenders (if you aren't going through a broker).
In my opinion, the most important things to find out (about the loan - this is excluding the condo fees, taxes, insurance etc., which you'll need to find out about and add to the cost):
1. Term of the loan - 15, 20, 30 years ? The term determines in part the interest rate, as well as how much you will pay over the life of the loan.
2. Total cost to you over the life of the loan - you'll see that with a 30 year loan, for example, you'll end up paying about twice the "cost" of the property including all the interest.
3. Monthly payments - what exactly is your payment, and for how long? If it is adjustable, what will the payments be when it changes, etc? I've only felt comfortable going with fixed rate loans, but if you think you'll be moving within a few years and/or your income will go up a lot, an adjustable rate could make sense - just be sure you really understand the worst case scenario.
4. Early payoff fee - you do not want a loan with an early payoff fee - because if you re-finance you will be required to pay this fee (sometimes loans have this clause only for the frist year to discourage flippers, so if you know you're not going to move it's not a big deal).
5. Interest rate & APR (apr is the actual rate you will be paying once you factor in the fees - you will find out if you examine this closely that paying higher fees up front is not necessarilly bad - could save you money in the long run).
6. Fees - what is the bank or broker charging for fees, in addition to the actual loan you are taking out? Will you be required to come up with money to pay these fees at closing? When you get closer to picking a lender, you'll want to get a "good-faith estimate" of closing costs. This will show the total on the loan, what all the various fees are, and how much you'll have to come up with in cash at closing if necessary.

in your offer, you can also ask for a "seller's assist" if you're short on cash for the down payment or would like to keep some of the cash you have for renovating (if that applies). it increases the total cost of the mortgage but gives you cash at closing