How large of a home can you actually afford?
There’s nothing more stressful than paying a mortgage that stretches you thin financially. Before you start exploring new homes for sale, you should to sit down and make a budget to determine how large of a home you can actually afford. This includes maintenance, utility bills, lawn costs, cleaning, insurance, taxes, and emergency homeowner expenses. Once you have that number in mind, steer away from homes that are at the top of your budget because they will inevitably be an issue financially in the long run.
1. Figure out where your money is going.
The ideal mortgage should make up no more than 36% of your monthly income. If it’s higher than that percentage, you’ll be less likely to afford other expenses like insurance, property taxes, and other monthly essentials. It’s vital to get a smaller home that won’t overcome your budget rather than get a big home that is too expensive.
2. Consider the utilities and repairs.
Larger homes naturally consume more electricity or gas to stay comfortable all year. This means that when you buy a bigger house, you should estimate the electric, heating, and cooling bill. Other maintenance expenses like gutter cleaning, power washing, HVAC servicing, duct cleaning, and other periodic upkeep needs to be considered as well. These are hidden costs that add up and can impact the affordability of a house.
3. Factor in your long-term plans.
It’s wise to buy a home with your future in mind, such as retiring or starting a family. Retirement often involves receiving a pension that is lower than your current salary. If you are thinking about starting a family, this sometimes means a temporary switch to one income or the added costs of daycare. Figuring in the possibility of a lower income for a season should be factored into your long-term financial plans.
Homes for Sale in Kansas City, MO
Brookfield Residential offers attractive houses of different sizes that work with diverse budgets! Check out our floor plans and move-in ready homes today!
