We often only discuss the price of Real Estate, when what we should be asking ourselves is, “what will it cost me a month to run this house” When we think about our homes, we think in terms of expenses. We know what we have as income monthly, then compare that to what you expect your expenses will be. This will will allow you to know in advance your comfort zone. So, here are the basics to consider. First, what is the monthly mortgage payment? That figure is compromised of both principal and interest, and most often your taxes. If you are not able to put down 20% as a down-payment, then you will be required to pay Private Mortgage Ins. or (PMI). This amount will vary depending of a number of factors, on average it should amount to about $66.00 per month. Next is Homeowners insurance. This figure will vary with location. However, the national Average is $910.00 per year, or $80.00 per month. If you live in a community with a homeowners association, then there will be a homeowners association fee for care and maintenance of common use areas, this will also vary. The other variables to consider will be upkeep and landscaping, a guideline to use would be 1% of the property value annually. So step one is, what can I afford to pay monthly, use that figure to then determine a price point you will be comfortable with. Happy House hunting!
