Hey, Kyle here with WintheHouseYouLove.com.
Your monthly payment is one of the most important things when you are shopping
for home, because you need to know that you can actually afford to buy the home.
Not only do you have upfront costs, we also have the monthly cost of your payment
plus utilities and any other maintenance costs you're going to have with the home.
And I keep seeing this issue that people have when it comes to
Zillow is they're searching for.
And so they, maybe you land across this home and you're
like, all this looks great.
I think it's in our price range.
And you look at this estimated monthly payment where it says 3203 is what
Zillow is suggesting as a monthly payment
On this home and a first glance, most people are like, cool, it's going
to cost me $3,200 to buy this home.
I can absolutely do that.
But the problem is Zillow
Isn't showing you a monthly payment that is likely going to be your scenario.
So what we then have to do is we have to scroll down.
And we're going to come to the monthly payment, monthly costs section here.
I cannot tell you the amount of times that I've talked with a client and they've
seen this number, and then they go and look at the home, they write an offer
and then they go and talk to a lender.
Find out the monthly cost is actually going to be quite a bit more than this.
And then they already are committed into this home.
And a lot of people, instead of saying, know, We, we took on too much.
We're going to back out of this.
They continue to move forward with the deal with the payment.
They're uncomfortable with
this mentality is what a lot of people
would call being house poor.
But we don't want that.
So this is why this number isn't super accurate.
So $3,203.
First of all, if we drop open this principal and interest.
We can see immediately that Zillow is estimating.
We're going to put 20% down.
Most people are not putting 20% down the minimum for first time.
Home buyers is 3% on a conventional loan.
However, a lot of people use five to 10%.
So in this instance, let's just say 5% will already that jumped our monthly
payment up to $3,900 instead of $3,200.
So this can price out.
A lot of people very quickly, especially with how competitive everything is.
People are looking near the higher end of their.
Price ranges.
And so if 3,200 a month was already at the high end of your price range,
you absolutely don't want your payment to come back to being 3,900.
Okay.
Then also for interest rates Zillow wants to basically.
Show you their mortgage lender options which is fine, but they're
showing you the lowest rate that is likely on their site, which may
not be the most realistic number.
And so I have a web page that you can go to when the house you love.com/rates.
And what it will do is it puts together the national averages
for different types of loans.
So you can see those if you'd like to your situation may be different than.
But this may be a more realistic figure to run off of then
just an advertised rate here.
Let's say we bring this to 3.5.
Then for mortgage insurance, we do want to include the mortgage insurance.
That's why the cost jumped up so much from the 20% down.
And if you're interested I do have a video about how PMI
can be used as an investment.
It's not just this terrible cost that happens all the time.
We unfortunately can't change this number, but I do have a
calculator that can help you here in a second
Property taxes.
I will give credit to Zillow.
They usually do a really good job with property taxes in the description.
I do have a link to this property tax map.
That's going to show you the rates for property taxes in different
states may change depending on which county you're in your state.
But these are going to be good averages for you to run of
And then homeowners insurance here usually fairly decent estimate.
Again, I do have a map for average rates in the US this is going to
depend a lot on where you're at.
So if you're in for instance, Florida is going to have a lot higher homeowners
insurance than we would here in Ohio, because there are hurricanes there
and no hurricanes yet have come to Ohio
So we have that in there.
And then usually Zillow does a good job with HOA fees.
And of course they're not including utilities.
They just show you the monthly mortgage payment.
So overall not terrible.
And what they're doing is not on purpose necessarily to try to they're
not showing you something that's not unrealistic, but they're showing something
that's not typical for most people.
I have a monthly payment calculator that might help you get a better idea.
The link is in the description.
This is free.
All we do in the beginning as we put in our loan details.
So we're going to do 5%.
We're going to do 3.5% is our interest rate for mortgage insurance.
We can change these a little bit.
So it conventional with good credit, conventional fair
credit FHA, VA, and USDA.
We're going to go with conventional with good credit.
Uses 0.6, 5% of the loan amount as mortgage insurance, which is going
to be a really good, typical average for you for homeowners insurance.
I have found that 60 is a really good estimate here.
If you're in maybe somewhere like Florida, you might bump this up to 80.
And so what that is, that's 0.6% of the purchase price as homeowners insurance,
and then how long the loan term is.
And so what you can do is put in 5725, We'll come up here, 570 to
500 we'll put in the square footage.
And so that is 3750.
Okay.
Then monthly HOA, there was none in there.
Then we're going to look at our annual.
Taxes here.
So taxes in Ohio are high 13,200 utility cost per square foot.
This is what the VA uses as their rough estimate for utilities.
This might be a really good one for you.
If it's an older home, you might want to bump this up to somewhere
like 14 to 16 cents per square foot.
Okay. Energy efficient home.
You might want to drop it down to 10 cents a square foot
and then maintenance savings.
This would be how much are we going to put into savings every month
for the maintenance of the home?
And so a lot of homeowners don't or new homeowners don't think that
they need something like this.
But this is really good to have monthly savings.
So when something needs to be fixed, even if it's hardware updates, if it's
paint, if it is a furnace goes out, you want to have that savings set aside.
So how much of the purchase price per year are you going to be saving?
A lot of people would suggest 1%.
That may be a little high.
0.5% for me, it feels comfortable.
And so here it would break down your mortgage payment with
much more realistic numbers.
So we can see we're pushing 4,100 compared to the initial 3,200
that was advertised on Zillow.
But this is a much more realistic estimate that we can look at
Instead of looking at the low rate, that was super interesting.
And then moving forward with it and then finding out the
monthly payments much higher.
And then what this also does is take then what you put in for utilities and monthly savings.
It gives you an estimate potentially of what you might pay.
So if you're looking at this and you're saying, oh, this actually seems high,
we can actually drop this down if you'd like to, depending on your area and
what you believe might be more accurate.
So then that shows you what the mortgage payment would be
plus potential other costs.
And then that would show you your total monthly payment here.
And you can do this when shopping with multiple homes.
So if I was looking at this home, I would put in a 236
Rubicon, 2, 3, 6 Rubicon
Cool. So 2, 3, 6 Rubicon.
And then you can also put in other homes as well to help you get a better idea.
Of what this monthly payment is going to be pleased, do not be the person
that just sees oh, $3,200 a month.
That sounds great.
That is not tailored to your scenario and your situation and
your payment will be different most likely than what is shown on Zillow.
And I don't want you to get emotionally invested into a home and
get excited and write a conscious.
If that's not going to be what the payment actually is.
One of the best ways to get the monthly payment is using a calculator like
the one in the description, and also talking to a loan officer who can
give you a full quote and a breakdown.
So if we're interested in talking with helpful loan officer who can walk you
through the process who operates the same way that I do and can give you a break.
And what your rate's going to be your monthly.
Payment's going to be an estimate.
All of those other costs with you to help you get a better understanding
of your budget and the upfront cost of the home you can go to when
the house you love.com/referral, or choose the link in the description.