My husband and I are considering purchasing our first home. We live in New York State. Cost of living index for our area is 112/100.
CURRENT RENTING SITUATION:
1 bedroom apartment, $890/ month includes all utilities, short but difficult (hill) bike commute.
We don't need much space - live comfortably in ~525 sq ft. Would VERY much like to establish veggie gardens (we are both avid gardeners). Rent has increased quite a bit in the past few years
POTENTIAL HOME PURCHASE SITUATION:
Option 1 = Live in city: shorter, easier bike commute. Housing stock is VERY old and generally in disrepair.
Average cost of typical small home in city: $160k-200k
Property taxes 1.99%, school taxes 1.7%
Option 2 = Live in suburbs: similar commute up big hills, housing generally quality better than city, larger yard better for garden
Average cost of typical small house in suburbs: $180k-200k
Property taxes 1.33%, school taxes 1.7%
Option 3 = Live in rural area: long commute that will suck in the winter, housing quality highly variable, lots of potential for garden and small livestock
Average cost of typical small house: $150k
Property taxes ~1%, school taxes depends, say 1.7%
FIRST QUESTION:
I see you people talking about ANNUAL property tax bills being less than $1k. Where the frick do you live?!? Our projected MONTHLY tax bill for a 100 year old, falling down house in the city valued at $200k would be $630 or $7.7k per year. Is this totally insane, or is it just me??
SECOND QUESTION:
Does it make financial sense to buy a house? By a combination of being fortunate enough to have parents who helped us out with school and being healthy, we have no debt. We have ~110k saved up for a down payment on a home. Assuming a $200k home with $90k mortgage, throwing an extra $300 per month at principle, 30 year mortgage at 4.65%, I calculate that we can pay off the mortgage in 13 years (conservatively - we could probably do it much faster). Majority of the cost would still be taxes and insurance... and that means, in 13 years, we'd just be paying taxes, home insurance, and home maintenance costs. Hmmm.
Thanks in advance - I'm really looking forward to getting other perspectives on this question!