Expense List for Buying a Home
There are many expenses that come with buying a home. The following list is a good example of what to expect:
Down payment - A minimum of 20% of the home's purchase price is usually required for the best loan terms and to avoid paying private mortgage insurance (see below), but it's entirely possible to buy a house with a smaller down payment.
Monthly mortgage payments - Include loan principal, interest, and sometimes additional charges for taxes and insurance.
Property taxes - Amounts vary, but the average is around 1.5% to 2% of a home's purchase price.
Homeowners insurance - Again, the cost varies. Call insurance companies for more information, or contact the Florida Department of Insurance for surveys of prices for insurance rates.
Private mortgage insurance (PMI) - If your down payment is less than 20% of the purchase price, this can tack several hundred dollars each year to your loan costs until the equity in your home reaches 22%, when you no longer need the insurance.
Maintenance - Varies year to year, but you may spend about 1% of the purchase price annually on maintenance and repairs.
Closing costs - Include points and other fees charged by the lender, which can add up to 3% of the amount you borrow; title insurance, from a few hundred to over a thousand dollars, depending on the purchase price of your home; inspections, about $200 to $500; and other miscellaneous fees. Many of these costs are negotiable between the buyer and seller, and are dependent on local customs. You can also negotiate with the lender to reduce, and in some cases completely waive, certain costs.
Housing expense ratio Typically, mortgage lenders won't allow these housing expenses to be more than one-third of your household monthly gross income. In other words, 28% of your monthly gross pay (for example, your annual salary divided by 12) is the usual maximum "housing expense ratio" allowed by lenders.
The "housing expense ratio" compares your monthly gross income to "PITI," an acronym for:
* Principal, or the amount you borrowed, of your mortgage loan
* Interest on the mortgage loan
* Taxes: property taxes
* Insurance: homeowners and private mortgage insurance (PMI)
Debt-to-income ratio.
On top of the 28% lenders allow for monthly housing expenses, they will usually let you spend another 10% for other debt repayments such as student loans, car loans and other similar loans. Added together, your housing expense ratio and monthly recurring debts make up your "debt-to-income ratio," and should not be higher than 38% of your monthly gross pay.
Now the Good News
The good news is that there are tax benefits to owning a home. The IRS lets you deduct mortgage interest and real property taxes, within limits, on your annual income tax return! Contact a real estate or tax attorney for the specifics in your area.
Genesis Font is an SEO and Developer for LoansInteractive.com> Mortgage and Loan Officer Websites. We also offer Quality Web Hosting Services.
MORE RESOURCES:
Northfield Storm Water Prevention Seminar May 22 Wilmette Life These seminars will give residents the opportunity to ask experts on storm water engineering, landscaping, gardening and more about ways to minimize storm water damage to their property as well as provide “how-to” tips to home owners. |
Army pledge support to DepEd's Brigada Eskwela Philippine Information Agency The troopers will extend services like masonry, carpentry, painting, plumbing, electrical, landscaping/gardening, and ordinary labor (cleaning). The 8th Infantry believes that education is one of the solutions to our security problem and will help ... |
Expo shows off Snohomish County's outdoor recreation The Seattle Times ... Department sponsors the expo and will be on hand with information on county programs and facilities, along with vendors and recreation groups with displays and demonstrations on camping, fishing, landscaping, gardening, climbing and boating. |
Myers Park home to nation's largest Earth-Kind research program Celina Record The Earth-Kind Environmental Stewardship Program is an American Society for Horticultural Science (ASHS)-recognized educational program focused on protecting the environment and conserving natural resources through research-based landscaping, gardening ... |
 Oman Daily Observer | Largest sewage treatment plant Oman Daily Observer The quality of treated water produced at Al Ansab STP is so good that it can be used for various purposes such as irrigation, beautification, landscaping, gardening, cleaning, toilet flushing and other industrial requirements. |
 North Shore Times | Better Homes and Gardens' presenter Jason Hodges to create Australian Garden ... North Shore Times Mr Hodges started his landscaping gardening maintenance business, Greenart Gardens 20 years ago with a ute from his parents' Willoughby home. “I find the north shore to be one of the most appreciative communities in Australia for general space and ... |
Home and Garden Show Bayshore Broadcasting News Centre The 29th annual Port Elgin Rotary Home and Garden Show has about 80 vendors at the Plex and takes place from 10 AM to 4 PM today (SAT) and tomorrow (SUN). Both shows feature landscaping, gardening and home renovation businesses. |
