The Real Costs of Buying and Owning a Home
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Who should own a house? It used to seem obvious that owning our own home was a goal that everybody wanted to reach. But these days, with so much dire news about foreclosures and job losses, is this still true? You must really take a good look at the true costs of owning your own house before you decide the best thing to do for your family.
A year or so ago, everybody was taking out loans that did not require a down payment. This option is very rare today. So before you are able to get a loan, you probably need to be able to put 20 percent of your home price down. The good news is this should give you home equity right away. The bad news is that you may deplete your savings. Please consider the other ccosts of home ownership before you decide to wipe out your cash account. Nobody wants to be broke when they own a home these days.
House purchases also tend to be better decisions when we are sure we will stay in our home for a few years. If you have any doubt that your life will be stable, you may be better served by keeping a lease. There is no guarantee that you will be able to sell your home at a profit these days, especially if you must sell it fast.
Many home shoppers only think about their mortgage payments. They have not considered property taxes which can cost thousands of dollars a year. Many homeowners were fine paying their mortgage bill every month. But when the end of the year rolled around they were unprepared for tax bills. If you do not have your taxes paid in an escrow account, can you set aside enough cash to cover your tax bills every year.
Are you ready to start paying repair bills. You cannot call somebody to complain about broken appliances. You will be reponsible for getting things fixed or replaced now. I have known many home owners who actually reduced their comfort level because they could not afford to get things fixed in a timely manner.
Depending upon where you live, you may also be forced to pay a bill for a neighborhood association. These bills can vary from modest to quite large.
Almost all homeowners must also carry homeowners insurance policies. The cost depends upon many factors, but it is usually a few thousand dollars a year. Renters buy renters insurance, but that is usually very cheap since it only covers contents.
Some of you will be able to deduct some of these costs. Interest and property taxes are common income tax deductions. But some people will not benefit from this because the amount will be less than the standard income tax deduction anyway.
I understand the advantages of home ownership. But I also understand that the decision to buy your own house should not be made lightly. Make sure you really figure out how much it will cost you to own before you buy.
Come do some shopping for the best homeowners insurance rates .
