The desire to buy a home makes a lot of sense. It’s part of the American dream for so many. While renting can have its perks, being the sole owner over your own residence means that the day comes that the mortgage is paid off and you alone own the home you live in. There are power and peace of mind in that, and those benefits are far more valuable than just the fact that you no longer have a mortgage payment to make.
Local Building Codes
As long as you’re within the local building codes and applicable HOA by-laws, you can do whatever you want with your property. You can add a garage, put in a pool, or even finish the basement into an apartment you rent out for more income streaming through.
Buying a home is largely a numbers game. You do what you can to raise your credit score, and you see what size mortgage you’re approved for. Then you go home shopping and buy the best one you find, right? Not always.
Size Of Mortgage
While you do have to be mindful of the size of the mortgage you get approved for, you also have to be mindful of how much of your monthly budget and income your home will eat up. In short, your credit score might just land you a mortgage amount that your paycheck can’t keep up with.
In budgeting for home ownership, many prospective buyers and aspiring homeowners don’t crunch all the numbers. They might look at how much the mortgage will cost each month, but they might forget about property taxes, utilities, HOA fees, and their homeowner’s policy.
Your homeowner’s policy is something you have to have. Not only does it cover many possible situations, it is a requirement of being able to even live in your home in many places.
Property Taxes And Policy Premium
It’s also a bill that might go up over time. If your home value rises over time, which happens in quite a few markets over a decade or longer, then your property taxes and policy premiums might go up.
As a general rule of thumb, your housing costs shouldn’t be more than a third of your income. That’s not just the mortgage, but the mortgage combined with the water, sewer, phone, cable, Internet, electricity, property taxes, homeowner’s policy, and anything else you pay regularly to keep up your home. Get homeowner insurance policies from best homeowner insurance agents today!