Another perspective

Watching Property Virgins on HGTV is fun. Yesterday, the host was trying to show that by looking at monthly payments instead of the huge mortgage amount, things aren’t as scary. So I decided to give it a go.

Realistically, I have to borrow a minimum of $250K after down payment to afford anything close to what I want. $250K mortgage at 25 years amortization and assuming 4.55% rate (my guess), would mean a payment of $1,390.64. This is according to HSBC’s mortgage payment calculator.

Not bad. But then I think of all the other monthly expenses. Monthly condo fees range between $250 - $450 for what I’ve been looking at , let’s say $350. Based on the bf’s bills and other similarly priced homes, property taxes will probably be around $1200/year or $100/month. Utilities, Internet, phone, and cable, will probably be another $150. That comes to about $1,900 per month of fixed expenses. Not to mention food and car (payment, insurance, and gas).

Ummm….Ok. Now I’m scared.

Another thing. People who say “Why pay rent when you can pay mortgage and own something at the end?” Well rent would be $1,000, which a lot more manageable than $1,900. Don’t get me wrong if I can I would, because you own it at the end. But I don’t want to living on mac n’ cheese so I can meet all the expenses of being a home owner.