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How Much House Payment Can I Afford For Home Buyers

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

Property Taxes

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

Related> Monthly Housing Expenses

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