When determining how much house you can really afford, there’s much to consider besides just the purchase price of the home. You’ll need to take into account a down payment, closing costs, as well as any taxes that need to be escrowed. Plus, when you own a home there will be property taxes, insurance, unexpected repairs and possibly homeowner association fees. You may want to consider a home that costs no more than three to four times your annual household income if you don’t have much additional debt.
How Much are Property Taxes?
Property taxes should be considered when determining how much house you can afford. They are a recurring, yearly cost that will likely only increase over the years. If you’re unsure what the current property taxes are on homes you are considering, please visit www.ErieCounty.gov for specific tax amounts listed by property.
Rent vs. Buy
When making the decision to rent or buy your next home there are several factors to consider, including the price of the home, how long you plan to stay, initial costs, upkeep required, recurring costs, and your tax rate.
Renting vs. buying is a personal choice. Some situations may make renting the best option for you, such as:
- A poor credit score
- Uncertainty of how long you wish to live there
- A possible change in income or position
- No time to manage home maintenance or repairs
Home ownership comes with many benefits. Those who choose to buy their home can enjoy:
- Earning equity in their own home
- Taking advantage of the tax deductions that come with paying interest on a mortgage
- Controlling all decisions on home improvements, maintenance and decorating choices
- Having a set monthly payment that you can control and budget for instead of being beholden to a landlord.
The PHFA Advantage
A PHFA (Pennsylvania Housing Finance Agency) loan is offered from the state of Pennsylvania through an approved lender and offers a fixed-rate 30-year term. These loans can offer down payment and closing cost assistance and be used in conjunction with conventional, VA, FHA and USDA loans. 100% financing is available. Learn more about PHFA loans in our Loan Center.