If it seems like the total cost of home ownership is a mystery, you're not alone. Real estate is complicated, and Golden Realty is here to help make things easier to understand. Use the formula below and the mortgage calculator to determine your total monthly payment.
The monthly cost of home ownership can be calculated by the formula PITI + H, where you add the following:
- Principle - the monthly proportion of your loan payment that pays down the balance of your loan.
- Interest - the monthly proportion of your loan payment that pays interest for borrowing the money. Your total loan payment = P + I.
- Taxes - the amount you pay in property taxes each month. In California, real estate property taxes usually begin at 1.25% of the value of the home. So if you take the cost of the home and multiply it by 0.0125, and then divide that by 12, you'll have the approximate amount for monthly taxes.
- Insurance - the amount you pay for property insurance coverage each month. Check with your insurer to find out what the annual premium is. Divide the annual premium by 12 to determine the amount you pay every month for property insurance.
- Homeowner Association dues - If you plan to buy in a community with a Homeowner Association, most will charge monthly dues to maintain common areas.