The historically low interest rates that we’ve seen for the past decade have done something unusual—and potentially dangerous—to those shopping for a home. The low rates have given people a false sense of security. They have convinced many of us that, “yes, we can afford that home. Just look at the monthly payment!”
While it may be true that home owners can afford their monthly payments, they often neglect to consider the other costs of owning a large home. From plumbing repairs to electricity costs, all that square footage brings on extra burdens.
Despite the tiny home movement, homes are still an average of 1,000 feet larger than they were in 1973 (according to an article by AEI). Not to mention, family sizes are smaller than they used to be, which contributes to the fact that the living space per person has nearly doubled!
Part of the impulse to purchase a large home may stem from all the gorgeous houses we see on reality television, including HGTV. It’s beginning to seem normal to have a walk-in closet the size of a locker room or a kitchen island that can seat a dozen of your friends.
And, yes, it is possible that individuals can easily afford their monthly payments for these massive homes, but there are many, many other factors to consider. It helps to do your research and know about the hidden costs of a home that lie beneath the surface of a monthly mortgage payment. These costs can be shocking for first time home owners or to someone who has been renting a space for a long time.
Here are ten hidden costs to take into consideration:
- Heating: Your heating bill goes up with every square foot you add!
- Upgrading windows: A 1,000 square foot home will typically have far fewer windows than a 3,000 square foot home. And windows are certainly not cheap!
- Plumbing repairs: More bathrooms and sinks = more potential for trouble.
- Electricity: It takes a lot of electricity to illuminate larger rooms.
- Lawn care: Typically, larger homes accompany larger lots. Even the edging around your home requires upkeep.
- Roof: Repairing or replacing a roof is costly, and larger homes inevitably have bigger roofs to worry about.
- Property Taxes: In short, the more valuable your home, the higher your property taxes. This one can sting!
- Furniture: You have to fill your space with something. In larger homes, you may find multiple coaches, chairs, beds (in spare bedrooms), desks, side tables and more. Do not underestimate the cost of furnishing your space.
- Paint: All those rooms will need to be repainted eventually. And don’t forget about the exterior! That will require fresh paint at some point as well.
- Cleaning: The cost for this one is either time or money. Either you’ll spend a good deal of time maintaining your large space, or you’ll have to hire a cleaning team to do it for you.
Even if you’re tempted by a low monthly mortgage payment, take the time to consider the additional costs of maintaining a large home. Is it worth it? Will the positives of owning a larger home outweigh the negatives? It’s a tough decision, and one that should be made with careful consideration!
For more insight on saving for and funding a new home, feel free to contact me!