New Yorkers who are on a tight budget might look at their mortgage payments in isolation from the other costs of owning a home. This is a serious mistake as the other, hidden costs of home ownership might be harder to budget, but they can easily turn a shoestring budget into a reason to sell, refinance, or file bankruptcy. It’s one of the reasons to look at mortgage payments differently from rent for an apartment. Here are several examples:
(1) Property taxes. Obviously, property taxes vary depending on your home’s value, which has more to do with its surrounding community than the buildings sitting on it. New Yorkers living outside the five boroughs might be happy to know that the state passed a law capping property taxes last summer. This will undoubtedly save homeowners outside New York City some money and provide them with breathing room if they’re having mortgage difficulties.
(2) Utilities. Some of these can be higher or lower depending on whether you own or rent. Providing heat, electricity, gas, water, sewer service, landlines, cable, satellite, even garbage service can all take a substantial amount out of your monthly incomes.
(3) Insurance. Obviously renters pay renters insurance and homeowners pay homeowner insurance, but there are quirks, such as if your house is older, it’ll cost more to insure. It’s a cost to bear in mind, even though most people pay it yearly rather than monthly.
(4) Maintenance. Part of this is cost but another part is time. Renters can require landlords repair and maintain the premises. This comes out of the landlord’s pocket, which ultimately comes out of your rent. Homeowners, though, have to do all the work themselves and pay for it too. This requires setting aside a budget for emergencies as well as the time necessary to conduct the repairs or wait for tradespeople to do it instead.
(5) Exterior maintenance. Homeowners have to trim trees and bushes, maintain lawns, shovel snow, etc. Renters do not. This means renters have less yard work to do, less equipment (like snow blowers) to store and maintain, and they don’t have to worry about whether neighbors’ unkempt lawns affect their homes’ values if they’re considering selling.
These costs (on top of mortgage payments) might escape those who are trying to maintain a house on a tighter budget. As a result, it’s worthwhile to consult with a bankruptcy attorney, or a financial planner if things aren’t so dire, before trying to cut corners or max out on credit card to maintain a house you can’t afford.
For more questions about bankruptcy, the automatic stay, effective strategies for dealing with foreclosure, and protecting your assets in bankruptcy please feel free to contact experienced bankruptcy attorney near me Bruce Weiner for a free initial consultation.
