Most buyers only look at the loan payment. Your real monthly cost has four parts. Here's an example on a $300,000 Wisconsin home with 5% down ($15,000).
1) Principal and interest: about $1,872 a month on a $285,000, 30-year fixed loan at an example 6.875% rate.
2) Property taxes: about $500 a month if your taxes are $6,000 a year. Every $1,000 a year in property taxes adds about $83 to your monthly payment, so taxes can change your budget more than the price.
3) Homeowners insurance: about $125 a month if your policy is $1,500 a year.
4) PMI (private mortgage insurance): about $119 a month in this example. PMI applies to most conventional loans with less than 20% down, and it can come off once you build enough equity.
Total: about $2,616 a month. That's roughly $745 more than the loan payment alone, which is why it pays to run the full numbers before you start touring.
Want to see your own numbers? Try my free mortgage calculator at adamzmortgageteam.com/mortgage-calculator. Enter your price, down payment and taxes, and it breaks out every piece of the payment.
Example only. Your rate, taxes, insurance and PMI will vary. Adam Zeman, Senior Loan Originator, Edge Home Finance, LLC · 11220 W Burleigh St, Suite 174, Wauwatosa, WI 53222 · NMLS #870441 · Company NMLS #891464 · Equal Housing Opportunity. Not a commitment to lend. All loans subject to credit approval.