The Condo Mania Team
Calculating your Monthly Payment for a Phoenix Condo or Loft
When you see a condo advertised for $150,000, how do you determine if you can comfortably afford it? In the world of rentals, you have just one monthly payment, but as a real estate owner, you’ll have more "ingredients" to a monthly payment, which will include:
Your principal and interest payments
This is your monthly payment to pay back the loan you’ll get from a lender.
Homeowner's Association Fees
HOA fees help maintain the common areas of a condominium or townhome community and often pay for some shared utilities, like water, sewer and garbage. Even most communities of single family homes have a homeowner’s association, but fees are often less because water, sewer, garbage and building maintenance is not included. You'll also find that highrise condo fees are higher than a low-rise condo. These fees are usually displayed on our website for each listing.
County taxes are actually paid twice a year, but most lenders like to collect that money from you on a monthly basis so that the money is available at tax time. The tax amount is usually displayed for each listing on our website.
For condos, you should consider a basic policy that is very inexpensive, usually under $30 per month. Condo insurance usually covers liability and your contents. If you are purchasing a townhome or patio home (stand-alone with no shared walls), you may need to purchase a true “homeowner’s” policy which can be somewhat more expensive. Check with your insurance professional to find out what coverage you’ll need.
Your Monthly Payment
To get an exact monthly payment, you’ll need to find out these four numbers from the individual listings on our website, and a mortgage professional. However, you can estimate a monthly payment. Here is a basic scenario for a first time homebuyer:
Home price: $150,000 Assumed Down payment: 10% or $15,000 Assumed interest rate: 4.8% Assumed loan: 30 year fixed principal and interest Loan Principal and interest: $708 per month
Private Mortgage Insurance (necessary
if your downpayment is less than 20%)
$56 per month Typical HOA: $180 per month Typical taxes: $100 per month Insurance: $20 Monthly payment: $1064 per month
The first year, you’ll be paying about $6,400 in interest, which sometimes can be a deduction on your income tax (talk to your accountant), and you’ll apply about $2064 in equity to your home. So it’s not really fair to compare your monthly mortgage payment to a rent payment, because you are accumulating equity. However, it is important to be able to handle the monthly mortgage payment in your budget.
The above calculation is for a typical situation, but your monthly payment may be different based on a number of factors, including your credit history, the current interest rates, your loan type and your down payment.
Want to know more? There are mortgage calculators on the internet that can help you with different scenarios. Then contact us to help you with first steps to owning your own place!
All figures are estimates. Please contact a mortgage professional to get the most current interest rates and payment amounts.
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Though not guaranteed, information and statistics in this article have been acquired from sources believed to be reliable.
The Fair Housing Act prohibits discrimination in housing based on color, race, religion, national origin, sex, familial status, or disability.
Information Deemed Reliable But Not Guaranteed. The information being provided is for consumer's personal, non-commercial use and may not be used for any purpose other than to identify prospective properties consumers may be interested in purchasing. This information, including square footage, while not guaranteed, has been acquired from sources believed to be reliable.
Last Updated: 2021-10-17 06:54:11