Dont be house poor, three things to consider before you buy

You may or may not have heard of the term house poor, not to be confused with the poor house. It has a meaning just as it sounds, having a house that is making you poor. Along with your mortgage payment you should consider how, taxes, utilities and Home Owner Associations as well when looking for a home. Don't roll the dice on your future, have a plan.

Firstly you want to consider taxes, because unlike your mortgage payment interest rate taxes don't remain fixed. 

• For example, if you live in a big city like San Antonio, Texas that is rapidly growing then you have likely noticed home prices climbing. While on the surface this may seem like a good thing, along with the climbing home prices are climbing property values. 
• Why does this matter you might be thinking, it is an important factor to keep in mind because as your property value goes up so does your property taxes. In San Antonio, Texas taxes increase by as much as $200 a month in a single tax year for a average priced house. This means that your formerly affordable payment is no longer so affordable. 

The next thing to consider is the price of utilities and any extras that may be involved. For example does the home have a pool, hot tub or water softener? 

• If so what are your cost going to be to maintain said equipment. If it is a pool, you will have to pay to have it cleaned, there will be equipment repairs and the extra electricity usage for the pumps and equipment. 
• The average cost of owning a pool is $256 a month, this adds $256 to your monthly expenses. Water softeners will use electricity but more importantly many systems run on salt which has to be regularly replenished. There is also the consideration of whether the system is rented or owned. If it is rented then what is the cost associated with transferring ownership over. 

The final thing to consider also has the potential to cost you the most. Carefully consider the HOA (home owners association) before you sign on the dotted line. 

• While this may not seem like a significant deal but if you have a mandatory HOA then there can be significant expense associated in the form of dues. But beyond that the HOA has the authority to enforce any and all the bylaws. This can cover anything from the height of your grass, to exterior paint color and even the breed of you dog. 
• Depending on the laws of your state many HOA's have the ability/authority to foreclose on your home or sue you for things like unpaid dues or fines. It can get extreme and sounds a bit crazy but I have seen it happen, people lose everything over a dispute with the HOA that they legal may not be able to win. 
• This being said your realtor should ensure that you get all the deed restrictions and information related to the HOA. Make sure that your realtor does a mandatory HOA addendum to protect you as the buyer.