Homeownership Costs | What to pay monthly when buying a house 🤔 🤔

Bills to pay when owning a house

So when I first bought my house I didn't realize that there were other things that came along with the payment each month so aside from the mortgage-the money that the lender has loaned to you so that you can make this purchase-there's some other things that you're going to be paying each month.

Private mortgage insurance

For example, you'll have your mortgage and then on top of that you're going to have private mortgage insurance unless you put down 20% or more down on your house. But, for a lot of us we do because we didn't put down 20% or more, or, if you have screaming awesome credit. There was one point where I had an 804 credit score and I didn't have to pay private mortgage insurance because they looked at me as someone who is going to make sure that they paid their bills. That was nice because that saved me maybe one or two hundred dollars a month. I've seen PMI as high as $350 per month and so it can get pretty high. Your interest rate is higher when you're doing those down payment assistance programs and that can make the payment a little bit higher each month.

Property taxes

The next thing that I want to let you guys know that you'll be paying are taxes now in Colorado Springs taxes can range anywhere from several hundred to thousands of dollars per year. If you buy a townhouse, it could be as small as three or four hundred per year, all the way up to twenty four hundred dollars per year depending on certain areas such as Lorson Ranch. You can look this up on the county assessor records website here. The payment is basically the annual payment divided by 12 and that's what you're going to be paying each month (even though technically they get paid twice a year from escrow on your behalf-consult your tax professional).

So, if your taxes are $2,400 for the year, then you'll just divide that by 12 and that brings you to $200 a month in taxes which can be pretty high. When I first bought my house, taxes were only $800 for the year, but then we all voted to invest in our schools so now our taxes are almost twice that amount. Even when you do move in and you have a low tax rate, it can always go up! So, to be on the safe side, always expect your monthly payment to go up. However, you can write off as a homeowner at tax time so it'll wash most times! They will put that into escrow and then you'll be paying for taxes in arrears. So, the following year if you were behind or you didn't have enough money for your taxes, that's going to go on to your monthly mortgage for the following year.

Interest rates

Aside from taxes, you're going to have interest payments. Interest is going to be on top of your mortgage payment. Now, when you look at all of your mortgage payments that you're going to be paying over the course of 15 to 30 years depending on the type of loan that you get, you'll notice that you'll be paying a lot more than the purchase price of your house for when you bought it when you went under contract. The interest over 30 years adds up very quickly! So, that's also going to be in your monthly payments and so they divide those payments typically in a fixed mortgage - they'll divide that up over 30 years. You will get a breakdown from your lender of each payment for each month and what percentage of that is interest and how much of that is actually going to your principal or your mortgage balance.

Homeowners Association Dues

After that, you might have an HOA and a lot of places in Colorado Springs have HOA dues. They have a homeowners association that collects these dues to basically manage the neighborhood. They will make sure that the neighborhood is being kept up. Maybe they have someone coming out and planting flowers and making the sidewalk look nice, shoveling snow, things like that. Our HOA is pretty inexpensive where I live. It's about ninety dollars for every three months. There are some neighborhoods that will charge up to three, even four-hundred dollars a month for HOA, but you typically do get things included with that like a swimming pool, trash services, if you're in a townhouse they might take care of your exterior insurance, landscaping, etc. You'll get an accountability sheet of where the money is going so they'll be very transparent with you.

Homeowners Insurance

The next thing you're going to need is homeowners insurance. Homeowners insurance is different than private mortgage insurance. With PMI, or private mortgage insurance, the lender needs to be able to ensure that they're going to get their money if you don't pay your mortgage back. That's why typically the lower your credit is, the higher your payment and your mortgage rate is going to be. Homeowners insurance is if something were to happen to your house such as a hail storm (which we've had plenty of those here) or a wind storm that came and took your roof off or half of your shingles, heavy snow that broke a branch off of your tree and landed on your house...anything that happens to your house - you're going to have to have homeowners insurance that's going to cover these types of things. You will have a deductible as well and that can be anywhere from one to two thousand just depending on your coverage, so make sure that you factor that cost in as well.

So, that's basically it! You have your mortgage, your private mortgage insurance, taxes, homeowners insurance, and possibly homeowner association dues each month. These are all the things that you're going to have to consider when you are buying a house. I hope that you learned something today! If you did please like this video and watch next week as I will be sharing with you every Wednesday. If you have any topics that you'd like to go over please put those in the comments and check out the freebies in the description box on YouTube. I hope you have a great week. I will see you on Wednesday!

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IRIS BURTON BROKER ASSOCIATE | RE/MAX® INTEGRITY

Colorado Springs, CO REALTOR®

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Don’t Sell on Your Own Just Because It’s a Sellers’ Market

In a sellers’ market, some homeowners might be tempted to try to sell their house on their own (known as For Sale By Owner, or FSBO) instead of working with a trusted real estate professional. When the inventory of homes for sale is as low as it is today, buyers are eager to snatch up virtually any house that comes to market. This makes it even more tempting to FSBO. As a result, some sellers think selling their house will be a breeze and see today’s market as an opportunity to FSBO. Let’s unpack why that’s a big mistake and may actually cost you more in the long run. According to the Profile of Home Buyers and Sellers published by the National Association of Realtors (NAR), 41% of homeowners who tried to sell their house as a FSBO did so to avoid paying a commission or fee. In reality, even in a sellers’ market, selling on your own likely means you’ll net a lower profit than when you sell with the help of an agent.

The NAR report explains: “FSBOs typically sell for less than the selling price of other homes; FSBO homes sold at a median of $217,900 in 2020 (up from $200,000 in 2019), and still far lower than the median selling price of all homes at $242,300. Agent-assisted homes sold for a median of $295,000...Sellers who began as a FSBO, then ended up working with an agent, received 98 percent of the asking price, but had to reduce their price the most before arriving at a final listing price.” When the seller knew the buyer, that amount was even lower, coming in at $176,700 (See graph below):That’s a lot of money to risk losing when you FSBO – far more than what you’d save on commission or other fees. Despite the advantages sellers have in today’s market, it’s still crucial to have the support of an expert to guide you through the process. Real estate professionals are trained negotiators with a ton of housing market insights that average homeowners may never have. An agent’s expertise can alleviate much of the stress of selling your house and help you close the best possible deal when you do.

Bottom Line If you’re ready to sell your house this year and you’re considering doing so on your own, be sure to think through that decision carefully. Odds are, you stand to gain the most by working with a knowledgeable and experienced real estate agent. Let’s connect to discuss how a trusted advisor can help you, especially in today’s market.

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Buying a House in 2021 | Why are homes selling so fast?

Buying a house in 2021 has been challenging and a bit tricky! The market is always changing, right? Why are homes selling so fast? When you couple historic low rates and a pandemic, apparently you get a housing crisis! People are wanting more space during the pandemic. We've learned to use our home for more than just eating and sleeping.

People need home offices, home gyms, and a bit more space to do all these things without feeling cramped. If you are buying a house for the first time, you definitely must watch! So, what does it take to buy a house in 2021? A lot more cash, patience, and imperfection.

Check out this non-comprehensive "buying a house" checklist of things you need to do to buy a home. Start searching for homes in Colorado Springs on my mobile app. Learn things like drive time to and from work, use the mortgage calculator to budget your new loan, or just browse homes in Cimarron Hills or Fort Carson maybe? Just hop on my website now or:

Download the mobile app ➳ https://irisburton.remax.com/mobile-apps

Learn how to budget for a new home! Can you afford it and does it make sense for you to do?

Download the sheet today! ➳ https://www.irisburton.com/new-home-budget-worksheet

Get even more resources on my website at ↓ https://www.irisburton.com/homebuyerresources

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