Your Mortgage Isn't Your Whole Payment: Planning for the Monthly Burn
Everyone is obsessing over mortgage rates, but insurance, the FAIR Plan, HOA dues, water and power are part of the real cost of owning a San Diego home.
Everyone is obsessing over the mortgage rate right now. But that's only one number in your monthly budget.
What you'll actually experience after close of escrow is the monthly burn: everything it takes to live in the home each month.
The four parts everyone knows
Your housing payment always includes the basics:
- Principal
- Interest
- Taxes
- Insurance
Add HOA dues if you have them. Those are the numbers your lender typically focuses on.
Where the pinch is coming from
Property taxes are actually a bright spot. Thanks to Prop 13, California's taxes are advantageous compared with many other states.
The other costs are ramping up:
Home insurance
Insurance has become a major part of the conversation in California. If you can't get all the coverage you need from a standard carrier, you may also need the California FAIR Plan, typically with a separate policy alongside it. That combination isn't cheap, and it's worth getting real quotes before you commit to a home.
HOA dues
This isn't only a condo issue. Some detached homes are in HOAs too. We regularly talk with clients whose dues have doubled in a couple of years.
Water
If you have a lawn and you're watering it, take a look at that bill.
Power
SDG&E bills belong in the plan too, especially in a larger home or one that needs more cooling.
Maintenance
Repairs don't show up on a monthly statement, but they still cost money. Set some aside.
Build your own spreadsheet
Very few people put this together before they buy, aside from the occasional engineer who comes in with a spreadsheet. Be like the engineer. Add up:
- Principal and interest
- Property taxes
- Homeowners insurance, including any FAIR Plan and companion policies
- Mortgage insurance, if any
- HOA dues and possible increases
- Water, power, gas and trash
- Landscaping and regular upkeep
- A monthly repair and replacement fund
These costs aren't prohibitive. They're just important to plan for, so you aren't surprised.
You need a plan, not just a loan
A quote tells you a rate. A plan shows you how the whole home fits your life, and what happens to your budget if some of those costs rise.
Want to see your real monthly burn before you buy? Talk to our team. We handle the real estate and the mortgage, so we can look at the whole picture.
Related reading: The True Cost of Buying a Home in San Diego
Disclaimer: Educational purposes only. The GreenHouse Group Inc. (CA DRE #01859042 | NMLS #366847). We are real estate and mortgage professionals, not CPAs, tax advisors, attorneys or insurance agents. This content is not individualized real estate, financial, tax, legal, insurance or lending advice. Costs vary by property, location, carrier and household. Get current quotes and consult qualified professionals about your situation.