A friend of mine recently asked me, “How much would my payments would be if I bought a $700,000 home?” I figured this is probably a fairly common question, so I thought I’d share. Based on a $700K purchase price, with 20% down ($140K), your mortgage payment would be about $3,733/mo. Now that’s based on a 30 yr fixed loan, at an interest rate of 4.625%.
That payment includes your principal and interest(P&I) payment of about $2878/mo. It also includes your property tax payment, of about $729/mo(based on 1.25% of the purchase price). It also includes an estimated home insurance payment of $125/mo.
What the $3,733 monthly payment does NOT include, is the tax savings you get for having a mortgage. Since you’re able to write off the mortgage interest and property taxes, you’d “save” about $804/mo (if you’re in the 28% tax bracket), making your true monthly payment about $2,929.
If you bought that same house, but put 25% down, your total monthly payment would be about $3,553 and your adjusted monthly payment(after your tax savings) would be about $2,787. As you can see, putting down an extra $35,000 only saves you about $220/mo. so you may want to think about your options before committing to a loan.
If you have questions, or would like to get a free good faith estimate(GFE), please contact Denny Oh at 858-243-2092 or [email protected]. I hate when people try and sell something to me, so I can assure you I will not try and “sell” you anything and I won’t spam you(I’m too busy to chase people who aren’t interested in my help).