The REAL Cost of a Home

Out of all the acronyms in the real estate and mortgage industries, the one that homebuyers become most familiar with is PITI, pronounced “pete-ee,” “pity” or “pee-eye-tee-eye,” depending on region. It stands for Principle, Interest, Taxes and Insurance and is otherwise known as your mortgage payment.

When a buyer is determining how much he or she can afford or how much he or she wants to pay for a home, PITI typically comes into play. There is, however, much more to the “cost” of a home than what goes out to the lender every month.

Sure, ongoing home maintenance costs should be factored into the equation but also the cost of actually living in the home. The cost for utilities, commuting, auto insurance, day care, etc. should all be considered when relocating from one state to another, from one city to another and even from neighborhood to neighborhood.

Sounds like a lot of research, doesn’t it? Au contraire, my home buying friend. NorthstarMLS – our local Multiple Listing Service – will crunch all the numbers for you. This is a truly innovative creation and I’m quite excited about it.

They’re calling the tool TLC engine and it stands for "true lifestyle costs." The data collected by the program includes fuel prices, car insurance rates, the cost of daycare and all the other variables that go into the ongoing costs of living in a certain area.

David Fondler, with, asked for specifics on how the TLCengine may be applied. One of the examples he gives is for commuting. TLC will take the make, model and year of your car, the average miles per gallon you get and the distance from the home to your office and spits out the cost of your daily commute – a handy tool when comparing two homes for sale in the Twin Cities.

The hidden costs of homeownership are something many buyers don’t consider, which is a pity. Sure, you may learn that the home you’ve fallen in love with is unaffordable but there’s just as good a chance you’ll learn you can afford a higher payment than you previously thought.

Gotta love technology!

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