Course 1 – Unit 4: Factoring In Forgotten Homeownership Costs

 

Mortgage Calculator Feature 1: Factoring In Forgotten Homeownership Costs

Mortgage calculators help a buyer with more than the obvious house price, interest rate, length of loan, and down payment.  Use a calculator that includes your home insurance payment, property tax rate, and, if applicable, home owner association dues. Even these comparatively small numbers can be important when determining what you can afford.

For example, home buyer with an income of $60,000 per year and ten percent down could afford a home of about $270,000. But this number might assume affordable insurance and taxes, and no homeowner’s association (HOA) dues.

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Lenders consider your entire payment when they qualify you for a house including loan principal and interest, homeowner’s insurance, property taxes, and HOA dues. Back to the above example of the buyer who makes $60,000 per year. This time, we will increase the extra costs as follows.

  • Homeowner’s insurance: +$300 per year
  • Property Tax: +0.2% per year
  • HOA dues: +$100 per month

The maximum price a buyer can afford drops a whopping $30,000.

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As a home buyer, look at the details of the real estate listing annual taxes and HOA dues,. Ask your insurance agent about a rough estimate of homeowner’s insurance cost.

 

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Turbo Mortgage LLC is a mortgage broker, performing licensed loan origination services in Texas.

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NMLS license number: 1752863

Turbo Mortgage LLC
1202 Lakeway Drive, Suite 5B
Lakeway, Texas 78734

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