When Owning A Home Doesn’t Pay

As I have said time and time again, not everyone should own a home.  Many feel that because they pay $1,000 per month in rent and the payment for owning a home would be the same that they should buy.  That isn’t correct.  Owning a home is a lifestyle. 

“When interest expense is taken into account with the costs of maintenance, property taxes, natural disaster insurance, PMI insurance, closing costs and brokerage fees, it becomes evident that the costs of owning a home are a heavy financial burden.”

Make sure to always consult a mortgage professional before buying.  I personally think that not enough people do their research ahead of time.  If you are thinking of buying in the next year or so you should get pre-approved now.  This will help you to plan accordingly and see what you need to do to put yourself in the best position when it comes to buying a home. 

The article below is very informative but the part that really stuck out to me was about using the different household income multipliers.  The median income for Broward, Palm Beach, and Miami-Dade County is $59,200.  And let’s say rates are at 5.125% today.  You would take the multiplier from the chart, 4.2733, times the median income of $59,200 which would give us a median home price of $252,979.36.  The median price should not exceed this.  According to the National Association of Realtors the median sales price in the 3rd quarter of 2009 was at $217,000.  Pretty cools isn’t it?