Wednesday, January 20, 2010

Are You Ready to Own Your Own Home?


By Karen Saley, Extension Specialist

It’s very enticing with the $8,000 tax credit available, the many home-buying incentive programs offered, and the number of discounted properties on hand, to jump into purchasing a home right now. But you may want to slow down, take a breath and look at the realities of home ownership.

Many people have a good idea of what the mortgage's principal and interest will cost every month, but principal and interest are only part of the equation. Property taxes, homeowner insurance mortgage insurance, and homeowners or condo association fees can typically add hundreds of dollars to each monthly payment.

Before you sign on the dotted line it's a good idea to get a rate quote from a couple of insurance companies, check with the county appraisers office to find out what the taxes are on the property , and ask the current owner about any association fees. Remember to include these figures along with any mortgage insurance in your calculations when determining how much monthly payment you can afford.

The Federal Housing Administration recommends that you spend no more than 31 percent of your before-tax income on a monthly house payment, including principal, interest, property taxes, homeowners insurance, mortgage insurance and homeowners or condo association dues. Once your monthly payment begins exceeding that 31 percent you may be in jeopardy of not having enough monthly income to cover the rest of your obligations and save for your future.

So before joining in the American dream of owning a home, do a little homework to ensure that your dream doesn’t turn into a nightmare.


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Company and product listings do not represent endorsement by either: Pinellas County Extension, Pinellas County or the University of Florida / Institute of Food and Agricultural Sciences.