Why the Mortgage Payment Is Only Part of the Equation

One of the biggest mistakes buyers can make is evaluating affordability based almost entirely on the mortgage payment.

Owning property in Florida involves several expenses that can change substantially from one property to another.

Two homes with the same purchase price may have very different monthly ownership costs.

Property taxes depend on several factors, including the property’s assessed value and applicable exemptions.

A buyer should not automatically assume that the seller’s current tax bill will remain the same after the property transfers.

Insurance costs can vary significantly depending on:

Insurance should be investigated early in the purchase process.

Properties located in certain flood zones may require flood insurance when financed.

Even when coverage is not required, buyers should understand the property’s flood exposure.

Homeowners associations may charge monthly, quarterly or annual assessments.

Buyers should also investigate whether assessments are expected to increase in the future.

Community Development District assessments are common in many newer Florida communities.

These expenses may appear on the property tax bill and can add thousands of dollars annually to ownership costs.

Condominium owners may face additional exposure to:

The monthly association payment should never be evaluated in isolation.

Maintenance

Every property requires maintenance.

Buyers should budget for future expenses involving roofs, HVAC systems, appliances, plumbing and exterior components.

Instead of asking: “Can I afford the mortgage?”

Ask: “What will this property realistically cost me each year?”

That produces a much better purchasing decision.