We are often asked by clients to do quick calculations at a property of approximately what their monthly house payment would be for a given property. Here’s some quick tips so you have an idea when you are looking at properties:
Mortgage: With current mortgage rates you can calculate your mortgage at (approximately) $450.00 per $100,000 of mortgage. (In other words, a $500,000 mortgage would cost you about $2,250 per month).
Strata Fees: Depends on the property, but every listing should have a disclosure as to the strata fees, and what is included. Generally a two bedroom condo in the Tri-Cities is going to be around $300 and is likely to include your hot water and natural gas.
Hydro: Don’t forget to factor the cost of lighting and heating your home into the calculations.
Property Taxes: There should be a disclosure of the price of the property taxes on the listing. We always break this down to a monthly cost and roll it into our calculation.
Insurance: Don’t forget, you are going to have to get insurance on that new property of yours!
Cable and Internet: Not everyone has cable and internet, but if you do (I mean realistically everyone has internet) you need to factor this into your monthly costs as well.
Lastly, you should consider a “cushion” every month – money to put away in case there is a special assessment (in a strata) or something goes wrong in your detached home (such as needing a new roof). If you can put away $100 a month towards these unexpected expenses it will go a long way in the future.
Hopefully this helps people with understanding the monthly costs that go with buying a home. It isn’t just a mortgage payment – there are a lot of other expenses that come on a monthly basis and you need to make sure you’re ready for the financial commitment that comes with buying a home.
As always, we’re here to answer any questions you have regarding buying a home, or to sit down and help you budget for your purchase.
On a last note, just because you CAN afford a certain mortgage, doesn’t necessarily mean you should go up to that maximum number. It is up to you and what you’re comfortable with spending on a monthly basis. Give us a call today and let’s chat – 604-785-3340.