When you purchase a new home, the mortage payment is not your only monthly housing expenses. You need to consider your overall housing expenses when you decide to purchase a home. Besides your principal and interest mortgage payment, you need to consider other housing expenses such as property taxes and insurance. The larger you home is the more your property taxes will be and so will your insurance premium.
Housing Expenses For New Homeowner
A potential home buyer should think things through and realize that a large home will require a larger budget for housing expenses.
A larger home will cost more in housing expenses. It will cost more to heat your home in the winter and cool your home in the summer. It will cost you more to furnish your home as well.
One of the most important factor you should pay attention to when buying a new home is the property taxes. You will be stuck with paying for property taxes as long as you own your home. Even when you pay off your mortgage loan, your property taxes will need to be paid. Property taxes range from just a few hundred per year to thousands per year. In the mid 90’s, the City of Chicago increase property taxes by double digits year after year that hundreds, if not thousands, of homeowners with fixed income and no mortgage loan on their homes were forced to sell and move elsewhere.
Consider Homeowners Insurance And Property Taxes
If you are an upper middle aged homebuyer and are buying a home that you intend on staying for a long time and plan on retiring and living in the home, please consider the property taxes you will be paying. Remember that property taxes are not a fixed annual expense and can easily increase year after year. Some homeowner’s monthly property tax escrows are higher than their principal and interest mortgage payments.
Too much house
Beginning in the mid 90’s to the mid 2000’s McMansions were extremely popular and living large was the thing to do. Everyone in the neighborhood tried to have bigger homes. Then the 2008 real estate and banking meltdown happenned and foreclosures and bankruptcies have soared to historical levels. Now consumers have gotten wiser and are cautious in buying too much house. A larger home will cost more in housing expenses than a smaller home in all aspects from monthly mortgage payments, to expenses, to maintenance.