Calculate Your True Monthly Costs
If you want an in-depth look at your potential mortgage payment, look for a mortgage calculator that includes costs like homeowners insurance or property taxes. (You want more than just a sales price and loan interest rate.) To figure this out, head to Trulia’s mortgage calculator and click “advanced.” Homeowners insurance and property taxes will be part of the mortgage costs you pay each month. You may also need to add in PMI, or private mortgage insurance, if you put less than 10% down on the purchase.
Your monthly insurance premiums and your property taxes will depend on what you buy and where you live. When determining how much of your monthly income you can spend on a mortgage payment, you need to add in both these costs. To get an accurate estimate, call insurance providers for a quote and look up property tax rates in the city or county you plan to buy in.