How Much House Payment Can I Afford For Home Buyers
This BLOG On How Much House Payment Can I Afford For Home Buyers Was UPDATED On April 8th, 2019
When home buyers decide to purchase a new home, the mortgage payment is not the only monthly housing expenses.
- Home Buyers need to consider their overall housing expenses when deciding to purchase a home
- Besides principal and interest mortgage payment, potential homeowners need to consider other housing expenses such as mortgage insurance, property taxes, and homeowners insurance
- A higher priced home means higher utilities, higher property taxes, higher homeowners insurance, and higher mortgage insurance premium
New 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 the home in the winter and cool the home in the summer
- It will cost homeowners more to furnish the home as well
- As a homeowner, maintenance such as repairs and landscaping is the responsibilities of the homeowner
One of the most important factor home buyers should pay attention to when buying a new home is the property taxes.
- Property taxes need to be paid whether or not the homeowner has a mortgage or not
- Even when if the mortgage loan is paid off in full, 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
- The out of control increase of property taxes hurt homeowners with fixed income and no mortgage balance on their homes
- These homeowners were forced to sell and move elsewhere because they could no longer afford their property taxes
Consider How Much House Payment Can I Afford And Homeowners Insurance And Property Taxes
Senior Home Buyers planning on buying a home that intends on staying for a long time and plan on retiring and not moving, they need to consider the property taxes when buying a home.
- Remember that property taxes are not a fixed annual expense and can easily increase year after year.
- Some homeowner’s monthly property tax escrows can be higher than their principal and interest mortgage payments.
How Much House Payment Can I Afford And What Is 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 happened 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