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					Home Ownership Expense Calculator Compliments of Buyers Brokers Only, LLC
Mortgage Information and Assumptions
Purchase Price (Value)                                                                                                                                                  $250,000
Down Payment                                                                                                                                                              $7,500
Length of Mortgage (years)                                                                                                                                                    30
Yearly Mortgage Interest Rate                                                                                                                                              6.13%
Yearly Property Tax                                                                                                                                                        1.80%
Yearly Homeowners Insurance                                                                                                                                                0.40%
Monthly Private Mortgage Insurance (PMI)                                                                                                                                    $150
Yearly Maintenance                                                                                                                                                        $1,200
Yearly Improvements                                                                                                                                                       $1,500
Federal Income Tax Rate                                                                                                                                                    25.0%

Monthly Housing Payment
Loan Amount                                                                                                                                                         $242,500.00
Mortgage Payment (PI)                                                                                                                                                 $1,473.46
Property Tax (T)                                                                                                                                                        $500.00
Insurance (I)                                                                                                                                                            $83.93
                   Monthly Housing Payment (PITI)                                                                                                                    $2,057.39

Maintenance and Improvements
Monthly Maintenance                                                                                                                                                      $100.00
Monthly Improvements                                                                                                                                                     $125.00
                 Monthly Home Ownership Expense                                                                                                                       $2,282.39

Estimated Tax Adjustment
Note: This section only applies if you are itemizing your tax deductions
Estimated Monthly Mortgage Interest                                                                                                                                    $1,231.68
Monthly Tax Adjustment                                                                                                                                                   $432.92
                   Monthly Expenses (tax-adjusted)                                                                                                                    $1,849.47

Note: The calculations in this spreadsheet are only estimates and all the content is for informational purposes only. Please consult a tax professional and/or lending institution.                                                 Massachusetts Home Buyer Guide
Glossary of Terms
Purchase Price (Value)
   This calculator assumes that the purchase price of the home is the same as the appraised value of the home.

Down Payment
   The portion of the purchase price that the buyer pays up front in cash, which is not included in the mortgage loan. A larger
   down payment generally means a lower monthly payment and less total interest paid.

Length of Mortgage (years)
   The period of a loan, usually measured in years. Mortgage loans are usually 15 or 30 year periods.

Yearly Mortgage Interest Rate
   This calculator assumes a fixed annual interest rate. If the annual rate is 7%, then the monthly interest rate is 7%/12.

Yearly Property Tax
   (Real estate taxes) Annual property taxes are often based on a percentage of the property value. The average is around
   1.8%, but you should call your Tax Collector's office in the city where you plan to buy the home for more information.

Yearly Homeowners Insurance
   This type of insurance is meant to cover the dwelling, personal property, personal liability, etc. (depending on your specific
   policy). The annual cost of homeowner's insurance is often estimated as a percentage of the property value, averaging
   about 0.4%.

Monthly Private Mortgage Insurance (PMI)
   Many lenders require PMI when down payments are less than 20 percent of the purchase price.

Yearly Maintenance
   This includes repairs such as fixing plumbing, painting, or paying to have your lawn mowed and weeds pulled. When selling
   your house, maintenance costs are not tax deductible.

Yearly Improvements
   Although you might not spend this amount each year, improvements such as roof replacements, remodeling, additions, etc.
   need to be budgeted. Money spent on some improvements (particularly those that permanently increase the value) may
   actually be tax deductible when selling the home, so keep receipts.

Income Tax Rate
   It may be possible to realize deduct mortgage interest and property taxes on the homeowner's tax return. Consult with an
   accountant to determine what your tax rate will be and whether deductions will be possible. For 2005, the six federal
   income tax rates are 10%, 15%, 25%, 28%, 33% and 35%. Also add your state income tax rate.

Mortgage Payment (PI)
   Consists of both principal (P) and interest (I). Derived from the amount borrowed, the term of the loan, and the mortgage
   interest rate.

Monthly Housing Payment (PITI)
   The housing expense usually paid to the mortgage lender, consiting of Principal, Interest, property Tax, and Insurance.

Estimated Monthly Mortgage Interest
   The is the approximate monthly interest paid. With most mortgage loans, you will be paying less interest each payment. So,
   this estimate only accurate for the first few mortgage payments.

Monthly Tax Adjustment
   When mortgage interest and property tax are deductible, the monthly tax adjustment can be estimated by multiplying the
   tax rate by the mortgage interest and property tax. Keep in mind that you don't usually see these benefits until you file your
   tax return.

   Important: Having a mortgage does not mean that itemizing deductions is better than taking the standard deduction. You
   should run your taxes both ways to determine which way will give you the larger return.
   Massachusetts Home Buyer Network

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