When a mortgage lender gives you an estimate of what you’ll be paying each month for a fictitious property, it’s just an estimate. They’re using a dummy sale price, condo fees, and taxes until you have a specific property you actually want to buy. So consider this: taxes and condo/hoa fees can change how much you can actually afford.
If you’re looking a total monthly payment of $2,500, that means your Principal, Interest, Insurance, Taxes, and Condo/HOA fee (if appl.) have to total to $2,500 or less.
A higher condo fee eats into the total sale price you’ll be willing to pay. The difference in a condo fee of $300 versus $500 is about the same as a $50,000 increase in sale price.
Now consider tax rates around Northern Virginia…note: Herndon and Vienna (both towns) have additional taxes on top of Fairfax County rates:
Arlington County: $0.958/$100 Assessed
Alexandria City: $0.998/$100 Assessed
Fairfax County: $1.07/$100 Assessed
Falls Church City: $1.27/$100 Assessed
Vienna: $1.3121/$100 Assessed (includes $0.2421 Vienna tax)
Herndon: $1.335/$100 Assessed (includes $0.265 Herndon tax)
Fairfax City: $0.94/$100 Assessed
That means, a house assessed at $400,000 in Arlington will cost you $3,832/year in real estate taxes, while the same house will cost you $5,248/year in Vienna in real estate taxes. That’s a monthly difference of about $120.
All of these numbers play together when evaluating how much you can afford and where you can get the best house for your money. Please talk to me for more information and names of great lenders.