| As long as you know how many years you will | | | | do if you default on your property taxes. For |
| be paying your mortgage, the interest rate of | | | | this reason, the lender will collect money |
| the mortgage and how much money you will be | | | | from you every month to be used to pay your |
| borrowing, you can easily calculate a | | | | property taxes. |
| mortgage payment. The only problem is you | | | | |
| will only find out how much principle and | | | | You can figure your yearly property tax will |
| interest you will be paying each month. | | | | cost you at least, 1 to 2% of the worth of |
| | | | your home. So, on a $240,000 property, you |
| Unfortunately, there is a lot more involved | | | | can guess you will be paying $2,400 to $4,800 |
| in a monthly house payment than principle and | | | | a year. This calculates to $200 to $400 a |
| interest. It is these extras that can make | | | | month. |
| the difference between making mortgage | | | | |
| payments with ease, and foreclosure. | | | | This amount will depend upon where you live. |
| | | | You should be familiar with a town's mill |
| In this article you will find out how to | | | | rate before you buy a home there. Your |
| calculate a mortgage payment the right way, | | | | homeowner's policy will cost about $700 to |
| in its entirety. By doing this, you will | | | | $1,000 a year, so you can figure around $75 a |
| borrow an amount of money you will be able to | | | | month for this expense. |
| pay back without stress. This will make it | | | | |
| easier to budget your money without fear of | | | | Water and Sewer |
| getting behind on your payments. | | | | |
| | | | Another pair of monthly housing expenses are |
| Principal and Interest are the Starting Point | | | | water and sewer. If you live in the city, |
| | | | this is a classic case where they get you |
| $100,000 financed for 30 years at 7% requires | | | | coming and going. City water will easily cost |
| a mortgage payment of $665.30. Knowing this | | | | you $50 a month and the sewer, which is just |
| in today's market gives you a heads up when | | | | another word for tax, will cost you, in some |
| you need to quickly estimate a mortgage | | | | cities, about $1,000 a year, which figures |
| payment. Of course, the mortgage payment you | | | | out to $85 a month. |
| will be estimating will be the interest and | | | | |
| principle only. This is the starting ground | | | | If you live out of the city, your water and |
| from which your monthly house payment will be | | | | sewer charges become the cost of the upkeep |
| calculated. | | | | of your well and septic system. However, |
| | | | after all is said and done, one problem with |
| For simplicity's sake, we will say you are | | | | either one of these things will cost you an |
| thinking of buying a home where you will need | | | | amount that will be close to what the cost is |
| a mortgage of $200,000 and the going interest | | | | for city water and sewer. |
| rate is 7% and, like almost everyone else, | | | | |
| you will be financing for 30 years. This | | | | These costs will come at much larger |
| means your principle and interest payment | | | | intervals than a monthly expense but they |
| will be 2 times $665.30 or, $1,330.60 a | | | | will be much greater amounts. In other words, |
| month. Now, what else will be added to this | | | | it all evens up in the long run. Or should I |
| amount each month? | | | | say it all comes out in the wash? |
| | | | |
| Taxes and Insurance | | | | Your Payment is Bigger Than the Calculator |
| | | | Told You |
| Most lenders make sure you have homeowner's | | | | |
| insurance. They will also see to it you pay | | | | The end of the story is, to pay this $200,000 |
| your property taxes. They do this, not so | | | | mortgage; you will need to pay $1,330 a month |
| much because they are nice guys, but because | | | | for interest and principal. Plus, you will be |
| they don't want somebody else to take your | | | | paying, let's say, $300 a month property |
| property away from them. How could this | | | | taxes and $85 a month for homeowner's |
| happen? | | | | insurance. So far, this amounts to $1,710 |
| | | | monthly. Then add $50 for water and $85 for |
| If someone got hurt on your property and | | | | sewer and you will come up with $1,850 a |
| successfully sewed you, they could take | | | | month for your real mortgage payment. |
| everything you had, including your house. | | | | |
| This would give your lender a legal burden | | | | Of course, there are more expenses required |
| they wouldn't want or need. To prevent this | | | | to live, but taxes and insurance, along with |
| from happening, the lender usually collects | | | | water and sewer are things that people who |
| money from you each month to pay for your | | | | rent don't ordinarily pay. It is knowing |
| homeowner's policy. This way you and they | | | | about these expenses in advance that is the |
| will be protected against this kind of suit. | | | | key to realizing you could be overextending |
| | | | yourself financially thus, risking |
| Another entity that could fight your lender | | | | foreclosure. So, be sure to calculate your |
| for ownership of your house is the local | | | | complete monthly mortgage payment before you |
| government and this is exactly what they will | | | | say, "I'll take it! |