(NC)—Have you ever booked a vacation thinking you're getting an amazing deal, only to get a rude awakening when the total cost comes in after those pesky taxes and fees? Some home buyers have a similar experience with their first home – but worse, because when the purchase amount is greater, typically so are the additional fees.

“Buying a home means a large upfront financial commitment followed by on-going monthly expenses,” says Farhaneh Haque, the director of mortgage advice at TD Canada Trust. “After the upfront costs, a basic rule is that your total housing costs shouldn't exceed one-third of your gross income.”

To prevent sticker shock, do some research and thoroughly consider all of the costs of homeownership, Haque suggests. When you understand the true cost, you can set a budget that reflects what you can really afford. Take a look at some costs home buyers should consider:

Upfront costs:

• Down payment

• Closing costs

• Land transfer taxes

• Fees (e.g. notary, legal and title insurance fees)

• Moving costs

“Prepare your finances by establishing a big financial cushion,” says Haque. “This allows you to make a sizeable down payment, and still cover all the other upfront costs.”

On-going costs:

• Mortgage payments

• Property taxes

• Cost of utilities

• Cost of maintenance

“In addition to these costs, if you opt for a variable interest rate mortgage, be mindful that interest rates could rise, causing your mortgage payments to increase or increase your amortization period, so factor that into your budget as you're planning,” says Haque.

Setting a budget should be the first step in your house-hunt. It will help frame your search. Depending on where you live, there could be additional costs (for example additional travel costs to and from work), so do your research to make sure your budget accounts for everything.

There's more information on how to prepare your finances for homeownership available at www.tdcanadatrust.com/homeownership. www.newscanada.com