Expense List for Buying a Home

There are many expenses that come with buying a home. The following list is a good example of what to expect:

Down payment - A minimum of 20% of the home's purchase price is usually required for the best loan terms and to avoid paying private mortgage insurance (see below), but it's entirely possible to buy a house with a smaller down payment.

Monthly mortgage payments - Include loan principal, interest, and sometimes additional charges for taxes and insurance.

Property taxes - Amounts vary, but the average is around 1.5% to 2% of a home's purchase price.

Homeowners insurance - Again, the cost varies. Call insurance companies for more information, or contact the Florida Department of Insurance for surveys of prices for insurance rates.

Private mortgage insurance (PMI) - If your down payment is less than 20% of the purchase price, this can tack several hundred dollars each year to your loan costs until the equity in your home reaches 22%, when you no longer need the insurance.

Maintenance - Varies year to year, but you may spend about 1% of the purchase price annually on maintenance and repairs.

Closing costs - Include points and other fees charged by the lender, which can add up to 3% of the amount you borrow; title insurance, from a few hundred to over a thousand dollars, depending on the purchase price of your home; inspections, about $200 to $500; and other miscellaneous fees. Many of these costs are negotiable between the buyer and seller, and are dependent on local customs. You can also negotiate with the lender to reduce, and in some cases completely waive, certain costs.

Housing expense ratioTypically, mortgage lenders won't allow these housing expenses to be more than one-third of your household monthly gross income. In other words, 28% of your monthly gross pay (for example, your annual salary divided by 12) is the usual maximum "housing expense ratio" allowed by lenders.

The "housing expense ratio" compares your monthly gross income to "PITI," an acronym for:

* Principal, or the amount you borrowed, of your mortgage loan

* Interest on the mortgage loan

* Taxes: property taxes

* Insurance: homeowners and private mortgage insurance (PMI)

Debt-to-income ratio.

On top of the 28% lenders allow for monthly housing expenses, they will usually let you spend another 10% for other debt repayments such as student loans, car loans and other similar loans. Added together, your housing expense ratio and monthly recurring debts make up your "debt-to-income ratio," and should not be higher than 38% of your monthly gross pay.

Now the Good News

The good news is that there are tax benefits to owning a home. The IRS lets you deduct mortgage interest and real property taxes, within limits, on your annual income tax return! Contact a real estate or tax attorney for the specifics in your area.

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More than 40 states signed onto a proposed $25-billion deal with major mortgage servicers over faulty foreclosure practices. New York, Nevada and Delaware joined California in holding out for better terms.

More than 40 states signed onto a proposed $25-billion settlement with major mortgage servicers over faulty foreclosure procedures, but California, New York and other key states were still not among them.

California has until Monday to share in a multi-state deal with banks to obtain mortgage relief and reforms. Atty. Gen. Kamala Harris, who walked away from talks last year, says the door remains open.

With a Monday deadline at hand, California officials have resumed direct talks with the Obama administration about joining a multibillion-dollar, multi-state mortgage settlement with the nation's largest banks, a source said Sunday.

The talk show host pays $12 million for the 4,088-square-foot house with four bedrooms and four bathrooms. The ocean-view home sits on 1.26 bluff-top acres with beach access.

In one of the more talked-about transactions in town, actors Brad Pitt and Angelina Jolie have sold their Malibu beach house to daytime host and comedian Ellen De Generes for $12 million.

The four-bedroom, five-bathroom house built in 1920 for industrialist James Wigmore lists for $2,875,000.

A decorative cast stone entrance opens to this restored Spanish Colonial Revival-style house in Pasadena's South Orange Grove area. Built in 1920 for industrialist James Wigmore, the house retains such original details as coffered wood ceilings and arched doorways.

They don't believe they can sell their property for what it's worth, so they're spending money on making their homes more comfortable.

Do you fit any of these descriptions?

A biennial research report by the National Assn. of Realtors indicates that a handful of real estate agents and brokers and their clients either don't know the law or don't care to follow it.

When it comes to lawsuits, real estate agents and brokers tangle mostly among themselves.

The president aims to help about 3.5 million people with good credit who are unable to refinance at historically low rates because their homes are worth less than their mortgages.

 

The White House hopes to help millions of homeowners lower their monthly mortgage bill with a $5 billion to $10 billion plan to set up a streamlined refinancing program for people who are current on their payments.

The Standard & Poor's/Case-Shiller index of 20 large U.S. cities fell 1.3% in November from October as foreclosures continue to drag down the housing market.

Three straight months of home-price declines in the biggest U.S. cities showed that foreclosures remain a significant drag on a housing market that is entering its fifth year of deterioration.

L.A. Clipper Chris Paul may be quick down the court, but he moves pretty fast when it comes to buying multimillion-dollar real estate too.