Hidden Expenses of Home Ownership in New Jersey

Owning a home in New Jersey is an expensive proposition and has become even more so over the past few years. Look beyond your mortgage payment to find hidden costs. There are other expenses affecting not only your ability to pay but also your ability to qualify for a mortgage. So if you hear a lender say "afford" and "qualify" you should know they are not necessarily the same.

If you are considering home ownership and have applied for a pre-approval or loan, you have probably heard these terms. If your lender says you can "afford" a certain mortgage payment you need to understand that is the maximum amount you can pay each month.

Some lenders calculate the affordability number by adding 40% to your base mortgage payment. The final number will tell you what you will eventually pay. Since extra costs vary by location, and New Jersey is one of the more expensive states, there is no single method for calculating total cost of ownership.

Some of the more standard monthly cost items include utilities, taxes, insurance, homeowners' association charges, maintenance and improvements. Again, these costs will vary by location. If you live in a prestigious gated community, you can expect your HOA fees to be substantial.

Utilities in states such as New Jersey can also be expensive. Older homes that use heating oil have seen dramatic increases in their winter heating expenses. You need to have a good idea of what your average monthly utility costs will be before jumping into homeownership. New Jersey is also a state with very high property taxes.

While a new home may not require as much on-going maintenance, you will pay more initially for not having the maintenance and improvement issues. Older homes simply require more TLC - and money.

When calculating your total monthly costs, consult your realtor or mortgage broker for a realistic idea of your total expenses. Buying a home is an emotional decision. However, try to get past the emotion and be realistic about what you can afford.

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