This is something I haven't seen many online calculators do, but it is important. Step 4: Find the Maximum PI Payment Based on Available Funds Be conservative in your estimates (meaning overestimate expenses if necessary). You WILL have more expenses owning a home than renting. You can use these inputs to be more realistic about what you can afford. However, if you are being wise, you won't be trying to buy the biggest house you possibly can.
HOA and Other Expenses: Your lender might not include costs associated with home repair or utilities. Like the other expenses, this may require some iteration if you want to get more precise. Otherwise, the annual PMI might be as high as 1% of the current loan amount.
PMI: If your down payment is at least 20% of the cost of the home, then you shouldn't need to pay PMI. Then, if you find that this is a limiting factor, you can adjust it to a more realistic number. So, at first just estimate the insurance by calculating what it might be for an expensive home (such as =0.35%*500000). But WAIT! You can't do that in this spreadsheet because that will cause a circular reference. Homeowners Insurance: You can estimate the monthly insurance cost by multiplying the home value by 0.35%. You can do that by entering a formula like =3000/12 if you don't want to use some other calculator to divide the annual property tax by 12. Remember that the spreadsheet has you enter the MONTHLY cost. Property Taxes: If you are looking at specific houses, you can go online to to find out the exact property taxes for specific houses. This only involves subtraction, so I'm not going to list the formula.
These expenses are then subtracted from your Maximum Monthly Housing Payment found after step 2 to calculate your Maximum PI Payment Based on Expenses. In this calculator, you need to enter your best guess at the monthly costs for property tax, home owners insurance, private mortgage insurance (PMI), homeowners' association (HOA) fees, and other expenses that you and/or your lender want to consider as part of your total "housing expense payment." If you pay off your loan, YOU will be responsible to continue paying the tax and insurance. Side note: The company that services your loan will hold the tax and insurance portion of your payment in escrow and pay those bills when they come due. In steps 3 and 4 we need to calculate the PI portion of the payment so that we can calculate the maximum loan amount. The PI payment is just the Principal and Interest portion. PITI stands for Principal + Interest + Taxes + Insurance.
#Home budget spreadsheet australia full#
When we talk about a "mortgage payment" we are often talking about the full PITI payment. Key to Understanding: Find the Minimum of the Maximums So, we'll step through how this calculator works in detail, but you should also do more research to learn about the other factors involved in home buying. Some tools like this calculator can help simplify and explain things, but ultimately you need to consider all the different factors when making such a huge financial decision.
How This Calculator Worksīuying a home IS complicated.
#Home budget spreadsheet australia update#
Update : Fixed the formula in cell F31 that was making the Pie chart double-count the fixed closing costs. In addition to what the lender might be willing to give you, you should also evaluate your budget using something like our family budget planner to figure out if you can afford the monthly housing payment that these types of affordability calculators report. This calculator should only be used for educational purposes and definitely NOT as financial advice. IMPORTANT: People commonly use calculators like this to purchase the largest house they can, but that is often a big mistake.
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