One of main things on most people’s life plan is of course, home ownership. Although it’s a long ways off for me, I still love to think about it.
However, now the situation with the real estate market is a bit different than it was ten to twenty years ago, and buying a house can be a big financial burden if you’re not ready for it.
Here are some hidden costs to consider:
The Percent of Your Budget
In order to cope with all bills successfully and painlessly for your budget, experts say you shouldn’t spend more than 33% of your monthly income on housing. Lots of people buy houses they can afford without really thinking about how big of a chunk the mortgage payment takes out of their budget. Remember everything else you want to use your money for too, not just the payment you can comfortably make.
Aside from mortgage, owning a house means being obliged to pay property taxes and fees based on square footage and the neighborhood and sometimes building amenities. Another thing to consider is the cost of maintaining the property you own – repairing plumbing, cutting grass, taking care of electricity. The best solution for such expenses is setting aside about 2% of house cost. And don’t forget home insurance too. Yowza, that’s a lot of fees.
Of course, if you read this and still feel pumped about buying a home and are financially prepared, you can always look through free ads to find a house that you can afford in your area. Good luck!