Upstate New York offers a diverse range of places to live. From the historic towns of the Hudson Valley, with their picturesque river views, to the forests and mountainous terrain of the Catskills, with their spacious properties, there’s something to satisfy everyone’s desire to leave behind the overcrowding of city living and a small backyard for room to move.
Finding your perfect home and being able to afford it are two completely different things.
Beyond the home’s list price, buyers should also factor in property taxes, heating, insurance, and home repairs. These expenses can quickly add up to several hundred dollars per month and often surprise first-time home buyers.
The Expenses That Come Before Moving Day
Although many homebuyers save for months to come up with down payment money, many still don’t have enough to cover the numerous expenses they incur before closing on a property and moving in.
The closing process involves many costs, including attorney fees, appraisals, title insurance, and other fees, plus a variety of taxes. Home inspections, moving costs, and items you may need to stock your new home are other considerations.
Even if the older home you are looking at has wonderful original features like hardwood floors and wainscoting, it will likely have older electrical, plumbing, and roofing systems that may need replacing soon after you move in.
Even though an inspection will highlight several problems, it’s not a complete list. You should therefore set aside funds for unforeseen expenses after you’ve spent the lot on purchasing the home.
How Your Mortgage Affects the Bigger Picture
The loan that will likely become your largest monthly payment as a homeowner is worth exploring before you buy your home.
The interest rate is a big factor when buying a home. If you’re a veteran, active-duty military member, or other eligible service member, it’s worth comparing VA loan rates with conventional mortgage rates. Even though VA-backed loans require no down payment and no private mortgage insurance, you’ll still pay closing costs and possibly a funding fee. But these extra costs can be worth it if you qualify for a lower rate.
Even a fraction of a percent change in interest rates can increase your mortgage payments. On a $300,000 home with a 30-year fixed-rate mortgage at 6% interest, the monthly payment for principal and interest would be about $1,799. At 7%, the same payment would be $1,996 per month, not including property taxes and home insurance.
Other home financing options, including some designed for first-time home buyers, may also be worth considering. State- and city-sponsored programs for first-time home buyers can provide significant assistance. In addition, many types of government-backed mortgages are available, each with specific terms and conditions.
Comparing mortgage interest rates is only half the story. Reviewing lenders’ annual percentage rates, service fees, and the closing costs associated with different home loans will give you a clearer picture of how any given mortgage will affect your wallet now and down the road.
Property Taxes Can Change Your Budget
Property taxes vary by community throughout New York and can affect the cost of owning a home in Dutchess, Ulster, Orange, and Columbia counties.
Even if two homes have similar selling prices, no two towns or school districts can have similar tax rates. In some cases, the tax-rate difference could mean thousands of dollars in additional monthly costs for what appear to be similar homes.
For homes for sale in Dutchess County, the towns of Ulster and Orange counties, and Columbia County, property taxes can greatly affect a home’s affordable price when comparing similar homes.
When a home is listed for sale, the seller must provide a buyer with a copy of the property’s current tax bill within 3 days of closing. But remember, that bill can change! The town’s assessment and even the local tax rate can change every few years.
Homeowners who reside in primary homes may also benefit from the School Tax Relief (STAR) program. Homeowners with qualifying primary residences receive property tax relief from New York State.
Winter Brings Its Own Expenses
There’s nothing like coming home after a long day of work to a cozy home, lit up and warm after a long, cold day in Upstate NY’s winter.
For the size of your bill, you’ll need to factor in your home’s square footage and how well it’s insulated. The type of heating system is also a major cost factor. Most homes are heated using natural gas, but some also use oil, propane, electricity, or even wood.
Newly painted walls and cleared gutters may be the extent of repairs in a given year; a leaking roof or broken water heater can occur the following year.
The seller should provide recent utility bills, especially for heating. Bills for the several months preceding the showing will give a buyer a better sense of how much a house will cost to heat than the house’s square footage.
Make sure to check the age of the furnace or boiler, as well as the overall condition of the unit, to see if it will need any repairs in the near future and if possibly the whole system will need to be replaced.
Don’t Overlook Repairs and Everyday Costs
Home maintenance costs can be unpredictable from year to year. Some years you may paint a room or two and clean gutters, while in other years you may have major repairs to a leaky roof or failed hot water tank.
Rural homes can require more maintenance of private wells and septic systems. Long driveways may also need periodic attention, as well as the yard and exterior of the home.
Location can affect your budget in many ways.
Besides longer commutes to work, an affordable home outside the town center can cost you in fuel for daily trips and wear and tear on your vehicle.
As a remote worker, you may also want to check the Internet service available at the properties you’re considering. Not all rural properties have reliable Internet service.
He or she should also determine whether the property is in a flood zone and whether additional insurance is required.
Buy a Home That Fits Your Life, Not Just Your Budget
The amount you can qualify for to buy a home is not necessarily the amount you can afford.
Calculate your monthly payment before you consider putting in an offer. It includes the principal, interest, taxes, insurance, utility bills, and cost of gasoline to and from work. Also factor in the money you will need to maintain your home from time to time. Your new home should be somewhere you can live well.
Yes, owning a home in Upstate New York has many advantages, but it also has many costs, which is why you should look carefully at the costs before purchasing.
A house is where you live, not where you suffer!
