Do you really know how much you pay for your home?
People look at the price of the home itself and think that’s what they paid for their new home. Think again. There are many factors that go in to determining how much you ultimately end up paying for your home.
Things such as:
- Down payment
- Length of mortgage
- Interest rate
- Closing costs
- Mortgage insurance
- Home insurance
- Taxes
- Home owner association fees
These are some the the additional expenses that, added up, represents the true cost of your home. You’d be surprised to see that the $300,000 home you purchased really ended up costing you almost $600,000 when it was all said and done. Most homeowners fail to calculate the real cost of their home investment because they are fixated on the sticker price of the home and fail to see the additional costs and interest paid over time.
Best advice is to speak to your bank or mortgage broker and get a detailed breakdown of the true cost of the home based on the length of your mortgage and the interest rate you will be paying. After looking at these details, you may decide it’s better to build a larger down payment or wait until your credit score improves before applying for a mortgage loan.
Online tools like Bankrate offer free finance calculators that allow you to play around with the numbers to see what scenario will work best for you.
If you want to get a nice breakdown of what your dream home could end up costing you, check out this infographic from Clickscape that gives you a few sample scenarios and gives you a good idea of what that hoe is really going to cost you.
