Timeline for What is the formula for calculating the max value of a home purchase, including monthly property taxes
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| Dec 29, 2022 at 16:07 | history | bumped | CommunityBot | This question has answers that may be good or bad; the system has marked it active so that they can be reviewed. | |
| Nov 29, 2022 at 18:57 | comment | added | keshlam | Well you could handwave by estimating the total additional costs over how long you'll own the house or the life of the mortgage You might or might not want to adjust that for expected increase in those costs from year to year. Then add that to the purchase cost before trying to calculate the monthly payment. I'm not claiming that will give good results, just that it's a possible approach. | |
| Nov 29, 2022 at 18:43 | comment | added | Brandon | @keshlam closed-form answer is the term I was looking for, thank you! My next alternative was doing something iterative as you mentioned - taking my monthly budget etc, calculating the present value, adjusting for things that are a % of that final home price, and get the final payment including everything. Then iterating on the % of payment that goes to the mortgage till it fits my original budget. Seems to work (wrote up a little python script) but was hoping there was a better way. | |
| Nov 29, 2022 at 17:14 | comment | added | keshlam | I'm not sure there is a clised-form answer; you may just have to iterate/interpolate/approximate. | |
| Nov 29, 2022 at 15:51 | answer | added | Michael Lugo | timeline score: 1 | |
| Nov 28, 2022 at 22:52 | comment | added | chepner | There is no one function in Excel that will compute this for you. This is more a question about how to design a spreadsheet than it is about finance. | |
| Nov 28, 2022 at 22:08 | history | edited | Brandon | CC BY-SA 4.0 |
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| Nov 28, 2022 at 22:07 | comment | added | Brandon | I understand there are additional costs like insurance etc, I'm more looking for a mathematical / excel way to calculate "given this much $ per month and this property tax rate on the final number, how much can I afford to borrow?". PV seems to give you most of that answer, but I'm not sure how to factor in taxes into that calculation. Of course you can do it the other direction (pick a home value and fiddle with the numbers till it matches your monthly budget), but I'm trying to arrive at an answer without any "fiddling", so to speak. | |
| Nov 28, 2022 at 19:15 | comment | added | keshlam | Oh -- don't forget that insurance is also an ongoing cost, and can be a very large one if you're in a flood plane or other higher-risk area. And remember utilities, if you aren't used to paying them. Personally I didn't bother trying to calculate down this far. I just decided what my limit was, derated about 10% to allow for those incidentals, budgeted another 10% after purchase for renovation, and waved my hands until I took off. | |
| Nov 28, 2022 at 19:11 | comment | added | keshlam | Since property tax varies by town, and by assessed condition of the property -- and buying the property may be considered an assessment! -- you have to figure this out for each property individually. Figure out what you're willing to pay for the property. Convert that to a monthly payment. Add property taxes and maintenance and any other recurring costs to get total monthly cost. Decide if that's in a range you can afford. If not, lower how much you're willing to pay and repeat the process until you get a number you like. Then hope you can negotiate the seller down to something in that range. | |
| Nov 28, 2022 at 18:08 | comment | added | RonJohn | This confuses me. When determining how much house I can afford, I look at my existing budget. That puts a limit on how much I can pay each month. That monthly payment must include mortgage, insurance, maintenance, etc. | |
| S Nov 28, 2022 at 17:13 | review | First questions | |||
| Nov 28, 2022 at 22:44 | |||||
| S Nov 28, 2022 at 17:13 | history | asked | Brandon | CC BY-SA 4.0 |