3 Reasons You Should Look Beyond Your Mortgage Cost When Deciding if You Can Afford Your Home

When you decide if you can buy a home or not, you must consider the big picture. Obviously, you'll want to be sure you can afford your monthly mortgage payments. But your principal and interest are not the only expenses to consider.

In fact, it's vital to look beyond your mortgage costs and consider a host of other expenses including property taxes, insurance, HOA fees, utility costs, and ongoing maintenance and repair costs.

Here's why thinking about all of these expenses is so important when you decide if a home you're interested in buying is within your budget.

1. Your mortgage payment is just the start of the costs you'll incur

While taking on a new mortgage payment is a big financial commitment and it's natural to focus on this big expense, you can't forget to think about other new costs you'll face, as those can sometimes add up to be as much or more than your mortgage.

The median property tax bill in the U.S. comes in at around $2,971 annually, but is much higher in some states than others. In New Jersey, for example, the median real estate tax paid is a whopping $8,928. The mean annual spending on home maintenance also comes in at $2,335 while the average cost of home insurance offering $300,000 dwelling coverage is about $1,899 per year.

You need to take all of these costs into account because you'll have to pay them -- they aren't optional and the consequences of not covering them could be dire. You'll also potentially have several other new expenses, like higher utilities, lawn-care costs, gutter cleaning, and more depending on exactly what your new home requires.

2. You could face ongoing financial struggles if you have unplanned expenses

If you focus only on your mortgage payment and are taken by surprise when it comes to other home ownership costs, this could be a constant source of financial stress for you. Unplanned maintenance and repair expenses, or even higher utility costs you didn't consider, could mean you're forced to make other big cuts in your budget that leave you feeling deprived.

Other financial goals could suffer, too, like saving for retirement. If you're unable to invest enough for your future, your decision not to consider all housing costs could keep making life harder for you for decades to come.

3. Some of the other costs of homeownership will stay with you for life

Finally, while your mortgage will eventually be paid off, some of these other costs of homeownership -- like home maintenance, HOA fees, and property taxes -- are going to be with you for the entire time you live in the house.

If these costs are high, this could present a big financial burden -- especially when you eventually retire and have to decide whether to move or keep paying high property taxes, home maintenance expenses, or HOA fees on your fixed income after paychecks stop coming.

By making sure you do take these other expenses into account, though, you can ensure your house is affordable both now and in the future so you won't end up regretting your purchase.