How Much Does Home Ownership Cost?
When you consider a new home purchase, you always have to balance a couple of very real factors. There is no doubt that home ownership can provide you with a very real asset, family stability, and pride in the place you live. I believe these things are real. And yet, with the recent foreclosure disasters all across the US, we cannot deny that home ownership can also lead to financial ruin. Before you purchase a home, especially your first house, consider the true costs.
We have always been interested in this subject, but this article – Rent or Own : The Real Cost of Home Ownership – reminded us of it again. We ourselves, were renters, then owners, then renters, and then owners again as circumstances changed in our lives. And one thing we know is that frugal mavens must be flexible.
Get Real Numbers on the Cost of Home Ownership
We urge you to do some real calculations. Find out how much your new home purchase will really cost, and do not just rely on some figures a realtor supplies. They are always going to be optimistic, and yes, we have certainly caught them leaving some costs out. Here is an online home ownership cost calculator to get you started.
Before you buy a home, we urge you to consider:
Please keep all of these things in mind before you purchase a home. That $800 a month mortgage your lender is telling you about will probably not give you the whole story. You will probably do better to add another 50 percent or so to that monthly bill with taxes, insurance and all of the extras. If I was told my home loan payments were $800 a month, I would automatically turn that figure into $1,200. That way I would be pretty sure I would have money to cover taxes, insurance, and home repairs (a home warranty and cash for things the warranty will not cover).
Benefits of Home Ownership
Now do not misunderstand this article. Home ownership can be great, and some of the stability it provides will probably save you a lot of money down the road. A home mortgage can be defrayed by interest tax deductions too, especially when the mortgage is fairly new, and most of your mortgage payment equals interest! So in real terms, that $850 a month may work out to $650 a month after you consider the tax benefits. You won’t realize that every month, but when you file it can lower your bill.
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