Can You Afford To Buy?

It’s common knowledge that owning a home is cheaper than renting, but finding out just how much cheaper can be a frustrating guessing game. Most people aren’t quite sure how to figure out that final number – or even a ballpark number – because there are just so many different factors that affect it. However, there are three main areas that the average new buyer are confused about, so allow us to demystify those for you.

Your mortgage payment is not the amount you’ll be paying every month. Or rather, it’s not the full amount. Mortgages can look super low, but most people also opt to pay their property taxes and their homeowners insurance as a monthly payment. This means that the actual monthly bill for your house can increase by around 25% or more over the monthly mortgage amount.

Closing costs are not something new buyers think about a lot, but there are a ton of small charges associated with buying a home that add up quickly. They vary with each sale, but include things like inspection fees, titles searches, and association fees. A lot of them are negotiable, however, so shop around for inspectors or, as part of the final sale of the home, ask that the seller cover certain fees.

The state likes to give tax cuts to homeowners, and these aren’t negligible amounts either. Your first year will see huge returns on your taxes, simply because you’ve spent so much money to begin with. There are so many that even if you always do your own taxes, you should definitely pay an accountant to do them that first year; they’ll earn their keep and then some!