Take a deep breath. . .
Here's what you can expect to pay when buying a home:

Down payment. A minimum of 20% of the home's purchase price is usually required for the best loan terms and to avoid paying private mortgage insurance (see below), but it's entirely possible to buy a house with a smaller down payment. For details, click on Financing Options.

Monthly mortgage payments. Include loan principal, interest and may include additional charges for taxes and insurance. Click here to calculate your monthly mortgage payments.

Property taxes. Amounts vary, but the average is around 1.5% to 2% of a home's purchase price.

Homeowners insurance. Again, the cost varies. You can start calling insurance companies now for more information, or contact the Florida Department of Insurance for surveys of prices by clicking on "Insurance Rates."

Private mortgage insurance (PMI). Typically required by lenders if your down payment is less than 20% of the purchase price. This can tack several hundred dollars each year to your loan costs until the equity in your home reaches 22%, when you no longer need the insurance.

Maintenance. Varies year to year, but expect to spend about 1% of the purchase price annually on maintenance and repairs.

Closing costs. Including points and other fees charged by the lender, which can add up to 3% of the amount you borrow; title insurance, costing from a few hundred to over a thousand dollars, depending on the purchase price of your home; inspections, $200 to $500; and other miscellaneous fees. Many of these costs are negotiable between the buyer and seller, and are dependent on local customs. You can also negotiate with the lender to reduce, and in some cases completely waive, certain costs.

Housing expense ratio.
Lenders have a formula for determining if you qualify for a mortgage, which is simply a loan to buy a home. Typically, mortgage lenders won't allow these housing expenses to be more than one-third of your household monthly gross income. In other words, 28% of your monthly gross pay (i.e., annual salary divided by 12) is the usual maximum "housing expense ratio" allowed by lenders.

The "housing expense ratio" compares your monthly gross income to "PITI," an acronym for:
• Principal, or the amount you borrowed, of your mortgage loan
• Interest on the mortgage loan
• Taxes: property taxes
• Insurance: homeowners and private mortgage insurance (PMI)

Debt-to-income ratio.
On top of the 28% lenders allow for monthly housing expenses, they will usually let you spend another 10% for other debt repayments such as student loans, car loans and the like. Added together, your housing expense ratio and monthly recurring debts make up your "debt-to-income ratio," and should not be higher than 38% of your monthly gross pay.