TWENTY-FOUR THOUSAND DOLLARS for a roof over our head โ and that was only for our mortgage interest & taxes! Hahaโฆtalk about a wake up call.
If you are a home โownerโ Iโm sure you know what Iโm talkinโ about, but Iโve said it before, and Iโll say it again โ if youโre looking to own a home one day be absolutely certain youโre ready to pay for the associated costs.
There are a ton of benefits that go along with this โAmerican Dream,โ (tax write-offs, stability, equity, etc) but youโve got to be aware of the financial drains as well. And as most of you know, had I been more aware 2 1/2 years ago I would have done things a lot differently โ Like either bought a smaller place or continued renting for a couple more years.
But it is what it is, and today I thought it would be interesting to see the breakdown of how our living situation has changed financially since renting. The numbers may be off a bit as I canโt recall exactly what we paid while renting (I didnโt start tracking this stuff until after we bought โ when I realized I need to pay more attention!) but itโs pretty close:
|
CATEGORY
Mortgage(s)/Rent |
Owning
$1,800 |
Renting
$1,300 |
As you can see, we pay about $1,200 MORE a month right now . Thatโs pretty substantial, even with the tax write-offs (we may see about $600 of it back if I had to guess). But even crazier here, 100% of all that interest & taxes are NOT going towards the principal loans we took out on the house! Meaning we still would have owed the original $360k had we not been chipping away at it by our own accord (we have 100% financing, which surprisingly we actually like!)
So if you do own, or youโre thinking about owning, take all these things into consideration :) Just applying $100 or $200 extra a month towards your mortgages will drastically cut the amount of interest youโll eventually pay in the end & wonโt drive you *as* crazy. But I must warn you, itโs not that easy. Iโve been praising it for over a year now and I still struggle every time I sit down to do it! Hahaโฆnext time weโll be buying a place closer to the lower end of our budget, not our highest.
How much did you all end up dishing out in interest & taxes last year?
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My rental days were $300-385 for 1 bedroom apartment (600 sq ft). Water/trash were paid by landlord. Electric averaged $60. There was a laundry room, pool, club house and safe neighborhood.
I bought a 3 bed/1bath with carport 8 years ago. It's a 50 year old ranch with 960 sq ft. I have a laundry room and nicely sized kitchen. I also have a little yard. My mortgage is $376 with insurance/taxes. My water bill is $52, trash $11, electric $21 and gas is $39. All the bills are averaged. I paid about $3500 in repairs and maintenance with broken water heater, privacy fence replacement, 2 plumbing problems and locksmith twice.
The priceless part is having a little elbow room between the amorous or party animal neighbors. Also, my landlord had some tenants who trashed their apartments and the bugs and critters moved in. In a house, there is a little more room so the problems don't just move next door.
Wow, so cool to see the differences in price here. 3 Bedroom for a $376 mortgage? Yes please! hahaโฆ.although that would still get me stuck in one place (my real complaint with owning).
Appreciate you sharing!
I think most peole fail to take into account when going from โrentingโ to โowningโ are the unknown expenses. I would advise a sizable savings dedicated just for that purpose, otherwise your dream home can turn into your worst nightmare.
Yep, you got that right!