Property Manager MA: How to budget for your dream home
When you are a renter and you want to buy a home, you must be meticulous before you make any moves.
It is not easy saving up for a down payment as you should budget for it. This guide looks at how you can save money and move into your dream home.
It is easy for renters as they just must pay a monthly fee for their rent. However, it means that they don’t end up owning the home towards the end. When you are a homeowner, you must pay a mortgage, insurance, taxes. The mortgage is basically two payments as it has principal and interest. Once you get a better idea of the costs, you can see what sort of a house you can afford.
Some people don’t realise that the principal helps you pay off the loan balance every month while the interest is the cost of borrowing the money. If you use a mortgage calculator, you will know how much you should pay overall.
The taxes depend on the county you live in and are a small portion of the cost of your home.
Insurance is mandatory as it protects you if there is any disaster or if your home is damaged. You should ensure that the lender agrees to the replacement cost before you sign off on it. The insurance cost is around $700 to $1200 per year for a single-family home. If you opt for a condo, then you have an additional fee: the HOA dues. These include the common areas, maintenance, landscaping, exterior painting etc.
It helps to have savings in place so you can build up your reserve fund. You never know what it might come in use for.
Property Manager MA: Tax benefits
You get to deduct your mortgage interest and property taxes when you file your annual tax returns. This will lower the cost of your homeownership. The savings will add up over time.
Study rent-vs.-buy math
Do a comparison of how much it would cost you to rent vs buying the property. Do the math and see how much you would save with tax benefits for owning a home as compared to a rental. Go for homeownership as it will obviously be cheaper over the long run.
Mortgage which fits your budget and timeline
It doesn’t matter if you don’t have the funds to go for the home you want. You can go for a mortgage with as little as 3 percent. However, you will be paying for mortgage insurance and you won’t be able to make any tax deductions from it. Your payments will be quite high for the time period.
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