Appendix A: Worksheets on Consumer Controlled Housing
The Costs of Home Ownership
There are many costs when buying a home and as you live in that home over time. Here is an example using some very basic information. This should help you see if homeownership fits your own budget.
Cash Expenses Needed When Buying and Operating a Home
Buying a House
- Down payment. Usually expressed as a percentage of the value of the home, (i.e., "5% down"). The down payment is meant to be an expression of the buyer's personal stake in the ownership responsibility.
- Closing costs, escrow, and prepaid fees. Expenses the lender requires to be paid prior to or at closing. Typically, these costs run 3-5% of the value of the home.
- Cash reserve. An amount of money equal to the monthly house payment. The buyer may have to show the lender that the buyer has one or more months of house payment money available.
Ongoing Costs of Owning a Home
- Monthly house payment. "PITI" (Principle, Interest, Taxes, Insurance)
- Monthly utility payments. Electricity, gas, oil, phone, trash removal, etc.
- Maintenance, repairs, and replacements. Lawn mowing, fixing a broken window, replacing a worn-out refrigerator, etc.
Example of Buying Costs
Here is an example of buying a $100,000 house purchased using the HomeChoice demonstration mortgage program:
- Down Payment (5% as required in the HomeChoice Program)..... $5,000
- Closing Costs (estimated at 3%)..... $3,000
- Cash Reserve (HomeChoice requires two months of PITI reserve)..... $1,700
- Total Cash needed at closing..... $9,700
However, with HomeChoice, if you are eligible, you can get:
- Entry Cost assistance, up to..... -$6,000
- Cash Reserve assistance..... -$1,700
- With HomeChoice, the cash you will need at closing is..... $2,000
Example of Monthly Payments
Ongoing monthly expenses of this same home with a $95,000 mortgage:
- Principle and Interest (assume 30 year mortgage at 8.25%)..... $710
- Taxes (assume $1,200/year)..... $100
- Insurance (property, liability, mortgage)..... $40
- Monthly House Payment..... $850
- Monthly utility costs (estimated heating, electricity, gas, trash, water/sewer, other) $400
- Maintenance, repairs, replacements..... $50
- Monthly Homeownership Costs..... $1,300
The PDF file contains the following worksheets:
- Monthly Income and Expenses
- Your Available Cash and Assets
- Housing Considerations
- Accessibility Features
- Home Inspection
- Choosing a Service Provider
- Summary Housing Checklist
To view a PDF file, you must have Adobe Acrobat Reader on your computer. Acrobat Reader may be downloaded from the Adobe Website.
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A Guidebook on Consumer Controlled Housing for Minnesotans with Developmental Disabilities, a joint publication of Arc Minnesota and the Research and Training Center on Community Living, Institute on Community Integration (UAP), University of Minnesota.