How Much House Can You Really Afford in Central Texas? The Full Monthly Cost

A lender can tell you how much you're approved for. But the more important question is how much you're comfortable paying every month. In Central Texas, a few costs can surprise first-time buyers.

The pieces of your monthly payment

Most mortgage payments include four parts, often called PITI:

• Principal: paying down the loan
• Interest: the cost of borrowing
• Taxes: property taxes, usually collected monthly into escrow
• Insurance: homeowners insurance, also usually escrowed

Depending on your loan and down payment, you may also pay mortgage insurance.

Why Texas property taxes matter so much

Texas has no state income tax, and property taxes help make up the difference. That means two homes at the same price can have very different payments depending on the city, school district and special districts. Always look at the actual tax rate for a specific home, not an average.

HOA, MUD and PID fees

Many newer neighborhoods around Austin, Round Rock, Georgetown and Leander have HOA dues, and some sit in a Municipal Utility District (MUD) or Public Improvement District (PID), which can add to the tax bill. These aren't bad things, but they belong in your budget from day one.

Don't forget the non-payment costs

• Utilities, which may be higher than in an apartment
• Lawn care and maintenance
• A cushion for repairs, since there's no landlord to call

Find your comfortable number

Start with what you pay now for rent, then decide what you'd be comfortable paying as an owner. Work backward from that monthly number with your lender to find a price range that fits your life, not just your approval.

Get your free First-Time Buyer Roadmap

The Roadmap includes a simple budget worksheet to find your comfortable monthly payment. Southern Luxe Group helps first-time buyers in Austin, Round Rock, Georgetown, Cedar Park, Leander and Bryan–College Station go from "someday" to keys in hand. Get the free First-Time Buyer Roadmap or call Trina at (512) 629-9050.

This article is general information. Talk with a licensed mortgage lender about your specific numbers.