When interest rates are low, like they are now, it may seem like a good time to look at buying a home or condo. Home ownership calculators found online can be a great starting point for those looking to make a change in their living situation, but it’s important to calculate all of the costs of home ownership before making any decisions.
Mortgage payments are just one component. Here are a few other factors:
Talk to your insurance agent. Find out the costs of home insurance vs. what you are paying for renters insurance.
Go online and check property taxes. Your county treasurer issues these tax bills and they typically include the taxes for the city, school districts, community colleges, special taxing districts, flood control and more. As a renter, these taxes are already built into your rent.
Check with your tax adviser or review your taxes. See if the deduction you could take on the interest will be less than the standard itemized deduction. Many buyers don’t itemize their taxes and thus don’t see a reduction in taxes.
Calculate what the maintenance and HOA fees will be. Also, find out if the HOA fee includes the assessment. Does this include a pool, fitness center, cable, etc.?
Itemize which amenities you currently use in your apartment community. If you enjoy the gym or take yoga classes in your community, what will you pay to join a gym?
Understand all of the costs of living. Whether you’re in a home, rental or apartment, it can help you to make the right decision. It’s important to take the time to calculate all of the factors so you can be sure to stay within your budget.