Updated: Jun 11, 2021
This week we’re talking about the new Netflix show called Marriage or Mortgage. This is where a wedding planner and a real estate agent make pitches to a couple so they can decide which path that they want to go down. The show takes place in Nashville, Tennessee.
The premise is that the couples are going to choose one of the options based on their budget. Then wedding planner Sarah Miller takes them around town to show them various options as does Nicole Holmes, the real estate agent who takes them to three homes to show them what their future life could be.
So let’s get to some numbers so that we can see what these couples have to work with. The average budget on the show is between $25,000 - $35,000. As for the home prices, they ranged from the mid-$300,000’s to the upper $400,000 range.
So we can see that right off the bat these couples will already begin to carry a big load of debt if they choose the home or they will drain their cash reserves and perhaps some of their nest egg when making their decision.
While we’re not privy to the process by which these couples were cast for the show, one clear criterion was that they all fit in a particular financial category where they are not in a position to afford both a wedding and a down payment on a home.
So Let’s Throw Out Some Stats for the Cost of a Wedding
In the US, the average cost to get married is $38,700, according to WeddingWire's 2019 Newlywed report, which looked at data from more than 18,000 US-based newlyweds who got married in 2018. The ceremony and reception takes up a huge chunk of that, at $29,200.
So let’s run through the typical cost for a wedding:
Cake and desserts: $550
Lighting and décor: $1,400
Don’t forget the engagement ring and the honeymoon, which, according to WeddingWire, clock in at an average of $5,000 and $4,500 respectively.
From our research the average age to get married is 32 and the average salary is $47,736 according to Smart Asset; however, the median household income is $70,000 according to advisorsperspectives.com. Keep in mind that this is gross salary.
What will the House Cost?
So on the inverse when looking to buy a home according to the National Association of Realtors, the median price for a home is $303,900 as of January 2021.
If we took a $25,000 down payment or 8.2%, that would be a mortgage of $278,900. Using a 3.5% interest rate the mortgage payment for a 30-year fixed term comes to $1,252.39.
As for taxes for home with this price, the national average for taxes is in the range of $3,200. So let’s assume that’s $271 per month.
Then we factor in closing costs that are typically 2 - 5% of the mortgage price. At 2% that comes to $5,578. (We’ll also assume that the prepaid interest is factored in). Hence, when adding that to the down payment, the total investment is $30,578 and this is right in the range of the money that the couples on the show have in their budgets.
Now without 20% down payment on the home, there will be PMI applied each month and this typically ranges from .25 to 2%. So if we use the 2% as a guideline, this number is multiplied by $278,900 which comes to $5.578. Next, we take that number and divide by 12 and that comes to $465 per month.
If use .25% that comes to $697 per year or $58 per month. The cost for PMI is highly dependent on your credit score - for the sake of this discussion we’ll split the difference and say the monthly payment is $232.
Oh yeah! Don’t forget about hazard and/or homeowner’s insurance. The average cost according to PolicyGenius in a January 2021 report, it states that the average is $1,200 per year. So that’s $100 per month.
So Let’s Do Some Math on the Total Cost to Live in this Home
Mortgage Payment: $1,252 Taxes: $271
PMI: $232 Homeowner’s Insurance: $100