What Impacts Affordability

Buying Power

Buyers have more income and affordability has improved as well. This makes it an ideal time to consider buying a home or possibly buying the larger property. Incomes continue to increase greater than the rate of inflation. People are spending money in stores and restaurants. The average person is earning $50,605 and has $1,681 more than a year ago today. Taking the increased income and buying power makes it a great time to invest in your home or investment properties.

Taxes And Interest Rate

What goes into a mortgage payment? The mortgage payment includes PITI which stands for Principal, Interest, Taxes, and Insurance. Interest rates are lower than last year which is great for our real estate economy. However, interest rates are not all that impacts the monthly payment. The home you buy, the area you buy and the age of the roof will impact the taxes and the insurance. There can be a huge swing between different homes based upon the two factors,. You could have a less affordable home even though the two homes are the same price and interest rate for the loan. The issue is even bigger if the property has the save the home benefit that is part of a homestead exemption.

This is an important step for every buyer to do. When you go onto the property tax site, what you will see is what the current owner is paying. Instead, you should focus on what the taxes are likely to be next year if you purchase the home. You are going to want to take a look at a couple of things. The first thing I look at when I look at a property is what is the assessed value and the market value. Is there a differential? What happens when the new buyer purchases is that assessed value that's been locked in year after year after year for a homesteaded property resets. And you want to see how much of the potential of a reset you are going to have. That's a really good indicator. The difference between market and assessed. 

Homeowners Association Fees

The next big decision is about the type of association that you want to have for your property. It is also important to understand how much the fees are, what it covers and the history or past special assessments. Many communities are not setting enough reserves aside so when normal things happen they are forced to do a special assessment. This happens a lot in condos.

The other thing is making sure you're buying in the right association. If you are buying in a community with a lot of amenities and you don't want to use those amenities, it might be better to increase your sales price a little bit and buy in a community where you're getting more houses and fewer amenities. Because ultimately most people are concerned not by the price of the home, but the monthly payment or the investment they're going to make every single month.

Selecting the right community for you is key. Does it offer the right lifestyle that you desire? It is important to make sure you are not paying for amenities that you do not want to enjoy. Instead, should consider investing the amount you would spend on the fees in your mortgage payment. That way you will have a bigger home that you will actually enjoy.