How did you know when you were (financially) ready?

We're starting to look to buy our first house and I know how much we can afford to spend monthly, but don't know how much we can afford for the mortgage/taxes, because of all of the other variables: homeowners insurance, heating oil, electric, lawn care, etc. How in the world do you figure out what your expenses will be ahead of time?

Re: How did you know when you were (financially) ready?

How much savings do you have left after you've figured out what your mortgage bill would be? Do you currently pay utilities, phone, etc?

Re: How did you know when you were (financially) ready?

Re: How did you know when you were (financially) ready?

You have many variables when you buy a house.
The figures below are for
an average 1600 SQFT house.

Below is a break down of different styles and square footage:

Cape = around 1100 sqft,
Ranch around the same but can be expanded or extended.

Splits around 1600 sqft

Colonials and High Ranches 2100+)

You do not count a garage or a basement in square footage.

Average homeowners insurance not in a flood zone
about $1000 to $1500, with hurricane rider between 5,000 and a 10,000 deductible.

Lawn service 1/4 acre $25 to $35 a week in season plus 500 for spring and fall clean up add 75 per treatment for fertilizer between 4 an 7 treatments a season. Season starts in the end of March goes through September

I have gas with a 2200 sqft house runs in winter about 300 month, summer 100.
Oil, is more expensive right now.

Electric cost me about $100 to $150 month if we shut lights off and think about what we want in the fridge before we open it up. About $300 a month during the peak summer months

This is all for Long Island if you off the island the gas and electric rate will differ.

From my experience go have a long conversation with a good mortgage company and find the monthly number you feel comfortable with. Then you know the house you can afford to purchase.

Good Luck
Arthur

Good Luck Arthur

Re: How did you know when you were (financially) ready?

We asked our family members who live in similar sized houses how much they pay for household expenses and then looked at how much we each bring home monthly and then decided what we were comfortale paying for mortgage + taxes each month. We want to be able to save, and have the ability to do things we enjoy (going out to eat, vacations, shop).

Re: How did you know when you were (financially) ready?

If you know what area you want to live in, I would start on mlsli and look at the taxes of homes in that area that you like to get an idea of the range in taxes. For purposes of calculating a mortgage payment, ignore the STAR exemption, because most banks will escrow the full amount of taxes without STAR, so STAR won't affect your monthly payment. As far as insuance, that was a complete shock to me! Ours is close to $2000 a year, but we're really close to the water (although on the North Shore so I think that makes it a bit lower) and we have an underground oil tank, so that makes it higher too. Also, if you're not putting 20% down, don't forget to add in PMI! We close tomorrow and our escrow amount (the amount that we pay for taxes, HO insurance and PMI) is about $1500 on top of our mortgage amount.