I’m curious, as I don’t think I’ll be able to afford a house for a while - when you include a mortgage payment PLUS property taxes PLUS homeowner’s insurance PLUS utilities (include utilities such as electricity/water/gas but not necessarily phone, internet etc. as these are slightly more frivolous) PLUS home repairs as well as anything else directly associated with owning the house that I’m forgetting or unaware of, what does your house end up costing you per month, on average?
Well, I have a 200,000 mortgage. It costs me 1800 per month for payment, property taxes and insurance. Another $700 per month for utilities including cable with premium channels and high speed internet. So 2500 per month for my house. (However in FL, property taxes are reasonable until a lot of other states which get you for a lot more than the 3000 per year I currently pay)
I bought a condo for 115,000@5.25%, I pay 801.00 a month for principle plus interest plu escrow. Escrow covers my insurance, PMI, and most of my property taxes. Last year I had to pony up another $40 for property tax. I pay $160/month for Association fees (including water, sewer, heat, garbage, and other stuff) and 25-50/month for electric depending on a/c usage.
If you want more firm numbers on what you can afford and the average costs for your area, your bank probably has a mortgage officer who can help you with estimates and show you exactly what options are out there for you and what they will qualify you for. In my experience, you can’t afford as much as they say you can. There will be repair and maintanace costs that you won’t be able to judge until you actually make an offer on a place and get it inspected.
When you first get a job and a car those $20 bills go real fast.
When you move out on your own into an apartment those $100 bills go real fast.
When you buy a house to live in those $1000 bills go real fast.
My mortgage is for $80,000 at a fixed APR of 6.5%. The monthly payments are $505.65 per month, including property taxes, but I pay $250 extra principal each month. The co-op fee (for maintaining the building and paying the staff) is $400 per month.
Utilities are about $100 a month for cable (which includes my phone and internet service and a bunch of cool premium and on-demand crap), $90 for electricity, and $50 a month for gas. Water and sewage is free.
I don’t think the details of my mortgage payments will help, since I saved up a large deposit.
I would remark that my house was bought 15 years ago for £60,000 and is now valued at £150,000.
Our monthly mortgage is $4200 but we have all our utilities and insurance on auto pay, so I can honestly say we don’t pay much attention to those (which is probably a good thing since there’s not much we could do to cut those down any more than we already have).
I’m in Los Angeles also so maybe my numbers will be close to what you are looking at. I have an interest only loan (how else can anyone afford to but in LA?), so my payment is Interest, Property Taxes, and Insurance (with no PMI). The monthly payment is ~$2,750 per month. Utilities (Gas + Water/Power/Trash/Sewer) runs an average of $150 per month. So, $2,750 + $150 = total $2,900 per month.
BUT don’t forget that if you itemize your taxes, you get to knock off your Interest and Property Taxes from your taxable income. Estimating $2,500 (Int + Tax) per month x 12 month = $30,000. Say your income tax rate is 28%, you are saving $8,400 per year ($30,000 x .28). $8,400 year / 12 months = $700 per month. So, instead of our total of $2,900 stated above, we can think of it as $2,200 per month.
There are a couple of assumptions built in to the above. In order to avoid PMI you need to come up with a big enough down payment. If you get a “regular” loan (not Interest only) the monthly will be higher. And I didn’t give you my total loan amount (I’m shy that way) but I can tell you it’s an average Los Angeles property value. Also, I don’ t really account for future repairs. I figure I’ll work it out when the time comes.
…afford to BUY in LA…
My lords, where do you people live that the houses don’t cost that much?
I was having lunch with a classmate about 10 days ago and she was glumly telling me about how she and her (now) fiance can’t afford a single thing not located in a war zone in L.A., and they must easily clear about 170K between the 2 of them (at a very young age). We all have 5 year plans to leave this state just so we can buy property at some point before we die.
I don’ t want to get too hi-jacky, but I must say that they have plenty of income to afford a home in much of livable L.A.
I’m going to go out on a limb and say it’s all in how they manage their spending and manage their expectations. Yes, one must save a lot for a down payment. And no, one may not purchase a 2,000 sqr ft treasure “south of the boulevard” or near the beach on that income.
Per month:
Mortgage $0
Taxes $200
Power $120
Heat $200-300 (over the year)
Insurance $35
Say about $700
I don’t have a mortgage but utilities, phone, internet, satellite TV, insurance and taxes are about $700 a month. Add about $500 a year for electrical and plumbing things that we can’t do ourselves.
(If we had a mortgage, it’d be about $400 a month.)
anu-la1979, the Midwest is very affordable, but we have winter. 
Icarus, the deal is mostly that we’ve only been out of school a year (she’s a lawyer and he has a ma in engineering), and they’re a bit younger than me and these are their first real jobs (well, mine too). So 1) they have less money for a downpayment even with that salary, 2) They don’t have a long credit history since they were on the K-end of grad plan and 3) They have massive amounts of private student loan that they need to pay off faster.
Still, a solid chunk of our classmates own property in Chicago under exactly the same conditions. But the condo market has softned there.
Well, the thing is that a solid 2.5 hours of my day goes to commuting alone so I wouldn’t be inclined to purchase anywhere out of the Pasadena/Arcadia area even if I were to buy property here. I only work 40-50 hours maximum, on top of which I glob on an hour and 15 minutes of commute each way (on public transport)-but for a private firm attorney 60-70 can be de rigeur (as it is for her) so location really does matter. We’re pretty much all bound to neighbourhoods closer to downtown.
Let’s see…
My mortgage is $3000 per month (but it’s a 15, not a 30), my insurance is about $250 per month (? can’t remember- it’s lumped in with my auto), and my taxes are about $4200 per year.
God, that looks bad written out…
The economy of home ownership doesn’t apply in the short term. I don’t know of anyone who didn’t have a bitch of a time making ends meet the first year of home ownership…but things quickly improve after that.
It is an excellent inflation hedge. Your payments will increase slightly with property taxes, but nothing near like how rent increases.
It was a stretch for me almost 18 yrs. ago, but now I have a 3 BR house for way less than market rental rates on a 1 BR apartment…and that is with a 15 yr mortgage. Another couple of years and I will have the mortgage paid off. (refi’d the origional 30 yr note when rates dropped)
There are also many intangables that defy economic analysis.
I have two dogs that bring me a lot of joy. Landlords would not approve.
I have wierd hobbies. If I lived in an apartment I’d have to rent commercial space for the stuff I get up to in my garage and backyard.
Including insurance, body corporate, taxes, bills, mortgage, it’s probably around 2.3k a month.
We’re in a fairly expensive area. Anywhere worth living is at the very least 300k for a starter home (an unrenovated 2 bedroom house on a small plot of land). If you’ve been renting for awhile you won’t have this problem, but what nearly killed us was buying all the household goods we needed. Everything other than a bed, computers, and a coffee maker, we had to buy. I think we spent 15k in a couple of weeks.
Out of curiosity (as someone in her first year of home ownership) how do things improve? Is it because of salary increases, or getting used to the mortgage payments? It hasn’t been too bad for us so far, but it’s nice to hear that it gets easier.
Well, I kind of don’t count since this is for your house and I have an apartment, but my place costs me 500 a month in rent. I also pay the electric at usually about 50-65 a month and we have no insurance for our home, just cars. I don’t think we put much into the repairs and such, basically because everything we do is charged to the landlord because he gets the final product, but our current bills would put us at about…
6600 to 6780…not too bad for the bare essentials…
Brendon
I was just thinking the same thing.
My guess is that “they” don’t live on either coast, and certainly not in any metropolitan area in CA or the Northeast Corridor.
The mortgage was paid off years ago. Even with the over-65 abatement, my mom (because her name’s on the deed) still pays nearly $1K in property taxes each time around . Hubby and I just barely pay everything else.
Without the abatement, our property tax would roughly be $4 or 5K/year :eek:
Our mortgage is paid off.
Building management fee: $120/month
Electricity: $100
Gas: $50
Water: $50
Home telephone: $15
Property taxes: I don’t know those off the top of my head, but $75/month average is probably close.
Monthly total: about US$400-450