According to the Federal Housing Administration (FHA), depending on the current debt ratio, most people can typically afford to pay 29 percent of their gross monthly income for mortgage payments. For example, if you earn $50,000 annually, then your monthly income is $4,167. Twenty-nine percent of that is $1,208.

Utilities
The most obvious of additional housing expenses are utilities – gas, electricity and water. But dont forget about telephone, trash collection, and cable or satellite bills.

Taxes
As a property owner, you are responsible for property taxes. The rate will vary from city-to-city. In the City of Alexandria the 2007 tax rate is $.83 per $100 of assessed value, in Fairfax County it is $.89 per $100 of assessed value, and in Arlington it is $.818.  That means for a home with a market value of $400,000, yearly taxes will run between $4090 and $4450, depending on the county in which you purchase.  To get a general idea on how much the tax bill will be for a property, ask the seller for a copy of the previous years tax assessment. Your real estate professional can help you refine these figures.

Maintenance
With the joys of homeownership comes upkeep. You will want to set aside a small amount each month to pay for those rainy day repairs such as painting, plumbing, and carpet cleaning. The amount you budget will depend on the age of the home, as older homes tend to require more repairs because the appliances are older and may not be under warranty. 

Insurance
To protect yourself financially, in case something happens to your property or its contents, youll need homeowners insurance. Depending on the type of coverage and your area, the costs for homeowners insurance each year can be anywhere from a few hundred dollars to thousands of dollars. If you live in an area that has high risks for flooding, earthquakes, hurricanes, etc., you may need supplemental insurance. In addition, if you want broader or higher coverage for your collections or high-ticket items such as computers, jewelry, and artwork, you may want to purchase an endorsement/rider to your homeowners policy.

Remodeling/Upgrades
Whether you buy an older home or have one newly-built, there are going to be improvements you want to make. So, you need to consider remodeling and upgrading costs as well when determining your housing budget.

Maxine McLeod Miller is the managing broker of Prudential Carruthers REALTORS Old Town Alexandria office.  She may be reached at 703-836-1464.