Are You Buying a House That's Beyond Your Means?

Purchasing a home is a smart move, especially as you build up equity in that home. However, few people really understand the true cost of owning a home and figure the monthly mortgage payment is the amount they'll be spending to buy a home.

The banking industry and federal government looks for mortgage loan applicants to have debt-to-income of 43 percent or less. This means, your monthly bills should not exceed more than 43 percent of your monthly income. If you earn $2,000 per month, your debt should not exceed $860. As tempting as it is to purchase a large home, you really need to consider the true cost of owning a home and stick to a firm budget when house hunting.

Costs Associated With Owning a Home in Austin

Your mortgage is only a portion of the money you'll pay on your new home. You are required to hold homeowner's insurance if you have a mortgage. According to a 2011 report done by the Texas Legislature, homeowner's insurance costs in Texas are 52 to 76 percent higher than the U.S. average. In fact, sample rates for a 10-year-old wood-framed home in Austin, TX, that's valued at $200,000 put the monthly cost of homeowner's insurance at a range of $78 to $310, depending on the company.

In addition to homeowner's insurance, you will be paying for electricity, heating, and cooling. If you have a well, you may face repairs and well pump replacements every decade or so. If you're on a sewer, you'll pay a yearly fee for that. If you have a septic system, you must pay to have your septic pumped out every one to five years, depending on the number of people your home. Every 25 to 30 years on average, you'll need to replace your leach field, and that is a costly project, especially if a mound system is necessary.

Roofing, windows, and doors should be checked and replaced when necessary. You also pay for gas to mow your lawn, if necessary. Trees need to be trimmed back, especially if there are dead branches. If you have wood trim on your home's exterior, you'll be painting that every year or two. Plus, yearly applications to control termites and other damaging insects is critical to maintain your Texas home.

Choose a Home Wisely

Before you apply for an Austin, TX, mortgage, take all of these expenses into consideration. Total up the estimated costs and then see how much of a mortgage you can truly afford. Once you know that number, start using that estimate to shop for a home that you can afford, even with the added expenses that come with owning a home in Texas.