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