Saving 1% of the property’s value is a good starting point for annual maintenance expenses, says Ibijoke Akinbowale, director of the Housing Counseling Network at the National Community Reinvestment Coalition.
But, she notes, you may need to increase the value of the property by up to 2% depending on the age and condition of your home, the repairs you’ve already made, and the condition of your home. life expectancy of housing components such as the roof or the furnace.
Tips to avoid being poor at home
Even if you plan your home correctly, it is possible to become poor if a job loss or medical emergency prevents you from paying your bills.
Here are the steps you can take before and after buying a home to avoid spending too much of your income on homeownership:
Make a larger down payment. If you deposit more money, it will lower your monthly mortgage bill. While you can eliminate private mortgage insurance with a 20% down payment, make sure that the down payment you choose doesn’t leave you with no savings or unable to manage your monthly bills.
Start an emergency housing fund. Make sure you have enough room in your housing budget to continue building your emergency fund. Setting aside money each month specifically for housing expenses can provide you with a cushion for the unexpected.