You can afford the mortgage, but can you afford everything else?

We generally only focus on the mortgage amount & forget the other expenses that should definitely be factored in when trying to determine how much house you can afford. 

1.  Sewer or Septic? A septic tank can add potential costs for repairs or replacement, which can run in the thousands of dollars; sewer does not. 
2.  Costs of utilities.  ask the owners or call your local utility company & get last year's bills for February and August- generally the hotest & coldest months.  What if the average utility bill is $500/month?  A 1200sf condo will generally have better insulation/lower utilities than a 1200sf home, due to the fact that the condo is completely surrounded by other units.
3.  Pool?  Costs includes maintenance & repairs. DIY'rs will need brushes & chemicals & require regular chemical testing to make sure the chemical balance remains accurate to prevent organisms from forming. Hot weather can evaporate pool water to the point where you will need to add more, adding to your water bill. 
4.  Landscape & yard maintenance.  Hired monthly maintenance or DIY.  If you DIY, you will need a lawnmower, edger, weedwacker, gas, gloves, trash bags, etc.  Yard maintenance deals with pest & weed control.
5.  Pest control.  Termites & general pest for the interior and exterior of the home.
6.  A/C maintenance is generally suggested every 6 months and performed by a licensed A/C company.  
7.  Repairs and replacements for any electric appliance.

  • August 23 2011 - Orlando
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Answers (4)

Profile picture for Don Greenberg

Amy,

I think you have written a good article for first time home buyers or buyers that have recently finished school that don't think about ALL those little extra things that add up!

By the banks looking at all their ratios based on income and debt, they are TRYING to limit on what the mortgage payment is going to be and help prepare them for the other expenses associated with home ownership.

People today are much more careful about this then they were say five years ago!

Great tid bit of information, hopefully it reaches the right people.

  • December 09 2011
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@Don
Those ratios don't really help a good chunk of people. Many folks have the stance that if the bank says they can afford it, they can afford it. Those ratios don't take into account if they like to eat out every night, go on regular vacations, tithe, etc.

@Amy
Your list is a good start - but there is so much more to add. There are furnishings, tools you need to keep around the home for basic repairs, things you should do every year (like caulk tubs/windows), weekend project expenses (everything from spring cleaning to paint touch up to grout repair and beyond)...the list could go on for quite a while. Oh, and you can easily double your yearly time and financial commitment to upkeep if you have children and/or pets.
  • December 09 2011
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Great information! 
  • December 09 2011
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Profile picture for the_country_hick
Sewer has a monthly bill attached. A septic system does not. You can still be out a lot of money if the pipe to the sewer breaks on your property.

Did you think about the cost of replacing the roof, the furnace, the water pump, the plumbing, the electrical system, fixing a bad foundation or broken widows or the other things that can and (eventually) will break in a house?

The real issue is unexpected repairs that happen. The expected repairs (and normal maintenance) hurt a lot also. Then taxes and insurance are almost certain to cost more every year.
  • December 09 2011
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