With the present state of the real estate market there are countless individuals out there looking to purchase a new home. The fact of the matter is that there has really never been a better time to make a home purchase than right now. Not only are interest rates at an all time low, but the price of homes is continuing to drop. This combination of factors definitely makes it a hot buyers market. So if you have any inclination of buying a new home – whether for an investment, a second home or even for a change of primary residence – now is most certainly the time. The question for many people is where to purchase at. Have you given any consideration to this? How about New York City? Nothing really compares to a NYC home, and with the prices down as much as they are, you may not have another opportunity quite like this to purchase a home in one of the greatest cities on earth.

Even with such great bargains, a NYC home is still going to be more expensive than homes in other parts of the country. This is simply a function of there being so many wonderful things to do in New York and so little places left to develop. As such, if you do decide to purchase a NYC home, you would probably have to budget wisely. This means that you need to know precisely how much it will cost you to not only make the purchase, but to maintain your NYC home. After all, even a home in the greatest of places is not worth living in if you cannot afford to maintain your quality of life.

The first factor to consider in determining how much you will pay each month for your NYC home is your mortgage payment. The mortgage payment will be determined by how much you put down on your home. Obviously, if you put more into the down payment you will pay less on your mortgage payment each month. As a general rule of thumb a mortgage payment is $500 for every $100,000 borrowed. So if you buy a $500,000 home and put $200,000 down, your mortgage payment will be around $1,500 a month. If you buy the same house and put only $50,000 down, your monthly payment will be around $2,250.

You also need to take into consideration the money you will spend on taxes and insurance each month. Taxes will vary considerably depending on precisely where you live, but as a rule of thumb you will pay between 1 and 2 percent of your purchase price annually. This means that for a $500,000 home you will pay around $6,250 each year on taxes. Do not overlook this when determining what you can afford.

Another factor to consider is how much you will spend on utilities. Here again the amount you will pay for utilities depend on a variety of factors. You should call local New York utility providers to find an estimate.

Before purchasing your NYC home, you should do the math to make sure it is affordable. Add up all of the expenses mentioned in this article and give some allowance for furnishing and maintenance. If it is affordable, then New York might be the place for you.