Aug 8, 2013

Mortgage Calculator - How Much House Can You Really Afford?



How much house can you afford? A mortgage calculator is a good start but make sure you don't miss other monthly recurring expenses. Here is a simple equation to help you think about how much your house will really cost.

Remember to live below your means!



Mortgage Payment
+ Property Taxes
+ Utilities
+ Insurance 
+ Maintenance 
= Total Monthly House Expenses

Mortgage Payment
Use this calculator to get your monthly mortgage payment. This will include the interest and principal you pay to the lender. If you put down less than 20% you'll also have to pay property mortgage insurance (PMI).

Property Taxes
Varies depending on where you live. Expensive neighborhoods can have property taxes that are 2-3x higher than others so make sure to ask about the taxes before buying a home.

Utilities
This includes electric, gas and water bills. Ask the old homeowner what they pay because your payments will be similar. Bigger house = higher cost.

Insurance 
Property insurance covers the house and your personal belongings. Speak with an independent insurance agent to make sure you have the proper limits and get competitive quotes.

Maintenance 
A lot of new homeowners don't consider maintenance costs. This would include lawn care services, gutter repair, heating and air conditioning and cleaning services. These expenses can really add up!