How Much Have Raises in Rent, Mortgages, Insurance, HOA's, Property Taxes, etc. Affected You and Your Family the Past Few Years?

[seoulsearch]

Hey Everyone,

Lately I've been listening to YouTube channels in which realtors, despite making their living selling houses, are telling people NOT to buy a house unless they are absolutely sure they can afford it -- and to have a stockpile of money on the side for all the other expenses that come with it.

I'm listening to horror stories of rents, mortgages, fees, taxes, and insurance going up by 200, 500, even 1000% all over the country -- even in areas where people think they are "safe." I have a friend in the northern USA who was informed that her house insurance would be going up because of all the other policies the company pays out -- in Florida.

And with the fires that just happened in California, it seems inevitable that people all over the country are going to pay the price.

I'm interested in hearing how real-life people out there all over the USA and the world are being affected by these costs.

Let's use the past 3 years as a baseline (but you can go further back if you would like.)

* Using dollar amounts or percentages, how much have your costs gone up for housing? What things have been raised the most?

* Were these costs raised (higher than "normal" increases?) out of the blue or was there any warning/assessment/way to prepare in advance?

* What kinds of expenses caught you "by surprise"? For example, I've heard from several people who were quoted tax prices based on the land, then were completely blindsided by the enormous increase in taxes once they built a house on it.

* Are there any condominium owners out there? I've listened to all kinds of stories about "special assessments" and the merciless costs they are pushing onto condo residents. Has this happened to you?

* How has this affected you and your family? Where do you have to now cut back? Have you had to move, or take on new jobs?

And perhaps, most importantly:

* In what ways have you seen God help work things out to provide for you during this time?

My heart goes out to everyone who is having an especially hard time in these ways.

If you are in the midst of a struggle, please share what you feel comfortable with and let us know how we can best pray for you and your loved ones. 🙏

 

[BillyBob]

I am older and own my home, no mortgage payments! In that regard, I am less affected than most. Also, the fact that I live in Texas – I have seen my house/land tax cut in half. Maybe due to a surplus of funds in the state.
The three things that have increased the most for me are Insurance, food cost, and utilities.
Guess it's time to shop for new insurance. Not sure if there is anything to be done about the other two!
I really feel bad for the young folks. With interest rates up, they may need to wait to purchase home or other items

 

[seoulsearch]

I am older and own my home, no mortgage payments! In that regard, I am less affected than most. Also, the fact that I live in Texas – I have seen my house/land tax cut in half. Maybe due to a surplus of funds in the state.
The three things that have increased the most for me are Insurance, food cost, and utilities.
Guess it's time to shop for new insurance. Not sure if there is anything to be done about the other two!
I really feel bad for the young folks. With interest rates up, they may need to wait to purchase home or other items

It's awesome that you own your home! And God bless you for having empathy for others in this nearly-impossible home market.

I've heard more than one realtor say that a person must budget an additional $1500-$3000 a month beyond the mortgage for all the other expenses associated with owning a home (insurance, HOA, utilities, taxes, maintenance and repairs, etc.)

For that amount of money, I can rent a very suitable place and not have to worry about maintenance if I have a landlord/owner that actually keeps up with it (as well as save money on my own.)

I know it's always argued that renting is throwing away money, but I think a lot of people in today's market don't realize how much money they'll have to spend and still never get back even if they buy a home.

The most heartbreaking tale I listened to was of a senior couple who had worked hard to pay off their house, only to now be on the verge of losing it because their fixed income can't keep up with all the rising costs.

I feel terrible for anyone in this situation.

 

[Tall_Timbers]

We own our home. The Lord blessed me with the ability to manage money well. I lived well below my means for most of my life and I guess I still do because my means has risen a good bit over the years. I was about 30 when I purchased my first home. Lived in it for about 5 years. Before that I rented rooms from people. That cost me less than renting an apartment. That helped me to save the money needed to purchase that first house. Then for years after I got married we lived in military housing. Upon retirement I had a large log house custom built for us in Alaska. It came with a little over 10 acres of beautiful forest. Building with logs was much more expensive than framing with 2 by 4s but I wanted that log house and by then could afford it. We lived there for a little over 2 decades. The kids grew up and began their own lives and I was having trouble maintaining the property because somewhere along the way I had become an old man. Living in Alaska required quite a bit of work to maintain the property. Clearing snow took about 4 hours every time we had a snow dump, for example... and it was getting to the point where I just couldn't do it anymore. So we bought a row house in Cheyenne, ranch style, and sold the Alaska home. Tax rates in Wyoming are much lower than in Alaska. In Alaska the property tax rate was high enough that if I'd been single I probably could have rented somewhere for much less than just the property taxes on the house. Additionally, repairs up there cost a fortune. You need to have a lot of money reserved for when you need some system in your home fixed or replaced. I had a couple of 20K bills along the way. Filling up my oil tank for heating the house could cost more than 5K each time, depending on oil prices, which have been mostly high in recent years. Now that I'm out of Alaska and in a tax friendly state our cost of living is lower than it would be.

Of my 4 children, only one has purchased a house. He's leasing it now as he's in the military and stationed somewhere else now. He's renting a room in a house from someone in the D.C. area while his wife has student housing at Harvard. Inflation-wise, I don't think homes are much more out of reach for some than they ever have been. The issue, I think, is for many they're not making enough to afford the the things that life requires, so things like a house might be out of reach. Income for many just hasn't kept up with inflation.

As nice as owning a home might seem, there can be so many additional expenses, and sometimes large must-do expenses that come from out of nowhere, that unless you have a family, renting/leasing can be much more economical over time. If you live below your means eventually purchasing a home might be easy for you if you've socked away money and invested it.

I hear that we're in hard times, but the stores always seem full, restaurants busy... I'm sure some people are hurting but that hurt doesn't seem to be widespread.

 

[seoulsearch]

I hear that we're in hard times, but the stores always seem full, restaurants busy... I'm sure some people are hurting but that hurt doesn't seem to be widespread.

You've certainly had an incredible life and I always enjoy hearing about it!

I just wanted to add one thought about people hurting financially...

When I was growing up, my parents watched every penny, but my Dad had one love he wouldn't give up, and that was golf. He tried to get us into golfing as well, but I absolutely hated the country club scene. I went to a Christian school and didn't know any of the kids there, and I hated the atmosphere even more. We didn't have a fancy BMW, and I didn't wear the fancy boutique clothes the other kids had. But it was an invaluable life lesson.

My parents always told me, "Never be fooled, honey. A lot of people put on a show of having money, but don't actually have two nickels to rub together." My parents always taught me that it's not about how much you can look like you have -- a big house, a fancy car, designer clothes, exotic vacations -- but how much is really yours after paying everything off.

I think about this as YouTube tries to send me videos about people making shopping hauls and food reviews at fancy places. Instead, I like to watch the behind-the-scenes videos -- the ones honest enough to talk about how being an "influencer" is causing them to be under constant debt and stress; the people showing off all the things they bought with fraudulent government loans during The Event That Shall Not Be Named -- and are now facing prison time because of it.

I have a store credit card I opened only for the rewards that come with it. I recently charged about $11 to it and paid it off right away -- and noticed that the interest rate on this card is listed at 39.9%. I was dumbfounded. I have to admit that since I pay my cards in full, I'm always looking at the rewards I can get from them rather than the interest rates (as long as there's a grace period for payment and no annual fee.)

I've never paid interest on any credit card EXCEPT for a few times back in the old days when you had to mail in the payments, and for whatever reason, I forgot to send it off in time (I appreciate being able to set up the payments automatically now!) My parents were very strict about the belief that if we couldn't pay it off when the bill came, then we couldn't afford it -- and therefore couldn't buy it, unless it was an absolute emergency.

I see people buying a lot of stuff.

But I'm always wondering -- when the monthly bill comes, how high is the interest rate they're paying in order to "afford" such stuff? And how much of the bill are they able to pay? How many people would jump at a "sale" that says, "Come in on and pay 22% more than regular price!" And yet, this is what credit cards do, with the interest continually compounding if they can't pay in full.

To my horror, I actually had an economics professor who taught that when figuring out what you could afford, all you had to do was figure out what you could pay as a minimum each month. It didn't matter if the actual bill was $1000 -- if you could pay the required $50 minimum, then he said you could afford it. The unspoken conclusion was that when you die, all the debt you rack up is someone else's problem.

I always wonder what God would say about that.

I know times are hard for many, if not most people -- and people are still buying.

But being able to buy things and being able to afford them is not the same thing (at least in my old-fashioned way of thinking.)

Debt and credit keep the economy going -- but we always have to wonder, how long can this be sustained?

 

[BillyBob]

If there are any here considering a new home loan, this would be my advice.

• Get a amortization spreadsheet – sure you can find an Excel Spreadsheet online to copy or download.
• Go for a 30yr fixed rate loan.

Now consider the following example:

• The payment for a 250,000 home, thirty year, 4.5% is 1,266.71 which only includes principal and interest. It will not include any escrow payment.
• Before making this payment look ahead one month to see what the principal is for the 2nd payment. In my example it would be 329.21.
• Add this amount to your payment amount, making it 1,595.92.
• You have just made two payments and the 2nd payment only cost 329.21
• Keep in mind that each time you do this the principal will increase.
• If and when you reach the point that you can no longer do this, then just make a single payment of 1,266.71.
• However, if you keep this up throughout your loan - then your loan will be paid off in 15 years.

A 250,000 loan is probably not a good example, but it can be used to make my point.

 

[seoulsearch]

If there are any here considering a new home loan, this would be my advice.

• Get a amortization spreadsheet – sure you can find an Excel Spreadsheet online to copy or download.
• Go for a 30yr fixed rate loan.

Now consider the following example:

• The payment for a 250,000 home, thirty year, 4.5% is 1,266.71 which only includes principal and interest. It will not include any escrow payment.
• Before making this payment look ahead one month to see what the principal is for the 2nd payment. In my example it would be 329.21.
• Add this amount to you payment amount, making it 1,595.92.
• You have just made two payments and the 2nd payment only cost 329.21
• Keep in mind that each time you do this the principal will increase.
• If and when you reach the point that you can no longer do this, then just make a single payment of 1,266.71.
• However, if you keep this up throughout your loan - then your loan will be paid off in 15 years.

A 250,000 loan is probably not a good example, but it can be used to make my point.

Thank you so much for sharing this!

One precaution, I've read that many mortgage lenders now penalize borrowers for trying to pay more than your agreed-upon payment or if you try to pay off your loan early.

They're determined to get every penny of interest from borrowers and try to make sure you can't cut any corners.

Just another set of the ever-growing things in the fine print that they try to hide.

 

[BillyBob]

Thank you so much for sharing this!

One precaution, I've read that many mortgage lenders now penalize borrowers for trying to pay more than your agreed-upon payment or if you try to pay off your loan early.

They're determined to get every penny of interest from borrowers and try to make sure you can't cut any corners.

Just another set of the ever-growing things in the fine print that they try to hide.

Some lenders will tell you this, but very few will follow thru with their threats. I'm not even sure it would be legal for them to do this.

 

[seoulsearch]

Some lenders will tell you this, but very few will follow thru with their threats. I'm not even sure it would be legal for them to do this.

While I know Google certainly isn't the best place for answers, a quick search brought up an article dated September 2024 that says:

"Yes, you can be penalized for paying off your mortgage early, but it depends on the terms of your mortgage agreement. Some lenders include a prepayment clause in their mortgage agreements, which allows them to a charge a fee if you pay off your mortgage early, either full or in part." It also says these penalties may also apply if you sell or refinance within a certain amount of time and pay off the loan early.

I know it's something I'd be checking and double-checking if I bought a home.

Or a vehicle, as I've read that some auto loans now have these prepayment fee clauses that penalize paying them off early as well.

 

[Tall_Timbers]

I always wonder what God would say about that.

I read what He says just a bit ago: The borrower becomes the lender's slave. Proverbs 22:7

 

[Genipher]

Thank you so much for sharing this!

One precaution, I've read that many mortgage lenders now penalize borrowers for trying to pay more than your agreed-upon payment or if you try to pay off your loan early.

They're determined to get every penny of interest from borrowers and try to make sure you can't cut any corners.

Just another set of the ever-growing things in the fine print that they try to hide.

That's something we made sure to check before buying. Our lender doesn't ding for extra payments or early pay-off.

We have a fixed interest rate but every year our mortgage still gets "adjusted" due to insurance/property value. 🙄
We're paying $300 more a month than when we bought our house, 3 years ago. The only reason we can keep up with the increase is cause husband gets a raise every year. But it kinda sucks that we never get ahead cause the raise goes towards the rising house costs.

Still. Cheaper than renting!