One of the most essential parts of beginning your search for new house is hammering out your budget for how much house you can afford. Often you can get mortgage pre-approval for higher than you might actually feel comfortable paying, so it's really important to sit and actually crunch the numbers. However, there's more to consider than just your mortgage, especially if you are buying in a new city or state. Here are some things to consider when figuring out your actual expenses based on the home price.
Even if home prices seem reasonable in the area you are moving to, make sure that you also factor in how much property taxes will cost. Homes that have higher assessed value will be more expensive with taxes, and even though the mortgage itself may seem perfectly affordable, the taxes can increase your monthly payments by several hundred dollars. When meeting with a real estate agent or mortgage broker, talk about how property taxes are assessed in your area. You might be choosing to live in a city that has several different counties, with different tax values, or the city might charge for all those who live in the area. You might also have lower taxes in some suburb areas.
Increased or Decreased Insurance Rate
Insurance rates are determined by a number of factors in and outside of the home you are hoping to purchase. For example, you can have reduced insurance if the home you purchase doesn't have a lot of expensive upgrades, such as hand-scraped hardwood floors and custom cabinetry. But you can also have increased rates if your house is older or if it doesn't have updated wiring or heating systems. These are predictable increases wherever you live.
However, increases are not as predictable when they are based off the city and land where you live. For example, if flooding is common, you can expect to pay more for hazard insurance, or you might even need an extra policy for flooding that will significantly increase your yearly bill. It's best if you can meet with people in the neighborhood you hope to buy in to a get a feel for what insurance costs are like.
HOA or Local Fees
Finally, in some cities is is quite common to find HOAs, while in others, HOAs are not at all popular. If you are moving to a city where an HOA is the norm, you'll need to factor the cost into your budget. If there aren't any home association fees, you should still look at other town fees, like stormwater removal charges or costs to get fencing or renovation permits.
Visit sites like nolahomes.com to find homes for sale near you.