Question by TheGuy: What are the monthly payments a homeowner has to make?
Hi. Im looking to buy a house for me and my family for the first time. I have been approved for a loan of $ 400,000. I’m not really an expert in this kind of things, but I want to know what other payments will I be making monthly other than the mortgage itself. If I buy a house worth $ 350K and app. 3000 sq ft, what would be a good estimate of my monthly cost.
Thanks for all your help!
What do you think? Answer below!
City/state/county where you buy will affect all the costs.
Here are some estimates, based on where I live (and the budget I’ve developed)
Mortgage Payment (about 1800/month depending on interest rate you get. That assumes a 4% rate and 25 year amortization)
Cable and Internet (you can usually sign up for introductory deals for about $ 100.month for the first year or two)
Water/Sewer Bill (Tough to estimate, depends where you live, for me it’s about $ 50 per month. If you live in a dryer area, it can be double; if you’re getting water from a well, less. Even if you have a well and septic system and don’t pay a water/sewer bill, be sure to put money aside to repair these things when they break)
Electricity (are you somewhere hot with central air all the time? If so, expect $ 200 per month or more. I pay an average of about $ 50 per month, but I don’t use much electricity)
Gas Heating (May be electrical, may be gas. Depends on the length of the heating season. Up to $ 150 per month in the cold months, virtually nothing in the hot months)
Property taxes (best guess on a house that price is between $ 300 and $ 400 per month, unless you live somewhere super-rich)
Insurance: You should also have life insurance when you have a house and family. Don’t get “mortgage insurance” through the bank. Talk to a private, trusted broker. Get at least enough to cover the full mortgage value and 2 years salary. That’s for you and your spouse. Also insure the children (2 years salary, only) Depending on your age, health, etc. about $ 100 for you and your spouse and maybe 25-50 per kid. Critical illness insurance can also be a great idea for you and your spouse. And medical insurance.
Home insurance (Ranges anywhere from 60-150 per month) Find a good insurance broker for all your insurance needs.
Also start up costs; things you need to buy when owning a home that you may not already have, especially if you’re in an apartment. Lawnmowers, snowblowers, more furniture, etc. Budget about $ 5000 for these things.
And you should be putting a couple hundred into an “emergency/maintenance fund” every month. To pay to fix/buy things like the furnace, the fridge, the air conditioner, the dish washer, the sewer. When this funds starts growing really big, you can use the excess to put down towards the mortgage (I keep no more than $ 7500 in my fund, I figure it pays for 1 big problem and 1 medium one happening at the same time)
Then of course there’s all the stuff you are already paying: Car, gas, food, clothes, fun. And hopefully you’re setting aside for your retirement too! Extra cash can go towards lumpsum payments every year on your mortgage. You don’t want to carry a mortgage into retirement!
Mortgage
Insurance
Electric
Water and Sewer
Phone
Gas/heating oil
Cable/internet
Property taxes
Other fees – trash pickup, etc.
Contingency for maintenance (every couple of decades the furnace and roof will need replacing, etc.)
You are wise to look at the total costs so you don’t over-extend yourself.
Your bank or your real estate agent may be able to help you with information on typical costs for your region.