by Pamela Reeves
Scripps Howard News Service
You get married and find a rental house in a neat neighborhood that you can afford because you're both working. As time goes on, you dream of owning that big house down the street with a wrap-around porch.
It's listed at $329,000.
You start calculating. A 5 percent down payment would be $16,450 and closing costs would boost the initial costs to $20,000 or more.
That would leave a mortgage requiring a monthly payment of $2,100 at current rates.
You're already paying $1,800 a month in rent, so this mortgage might be affordable if you stretch. You're about to take mental possession of that porch when you realize that the mortgage figure doesn't include property taxes, insurance on the property to protect your interests or insurance to protect the lender's interest. That will add another $500 to $800 to the monthly tab, or even more depending on how high property taxes run in your neighborhood.
If the house is still within your financial reach, here are a few more points to consider:
- Are children in your future? If both salaries are crucial to the mortgage payment and there's no wiggle room, remember that someone will have to take care of the baby. That could mean loss of or reduction in one salary. If you want someone else to care for your infant, the price will be high unless you have accommodating family nearby.
- It's a definite plus if one or both of you is handy. Home repairs, especially on older houses, can cost a fortune.
- Will this house gobble up all of your fun money? You're only young once. Consider the trade-offs carefully. The porch or Paris?
(Reach Pamela Reeves at reevesp@shns.com or www.shns.com.)
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