Could Commuting Costs Factor Into Your Mortgage?
As you search for a new home, you may be considering a few places located slightly outside of the city. Perhaps a move to a rural location will help you get the upgrades you want in a house, like upgraded kitchens and bathrooms. You may even find that to qualify for a house that accommodates your growing family, moving away from downtown is the only option.
The Cost of High Mileage
Before making that move, however, it’s important to consider whether you’ll really be saving money by moving far away from your office. Unless you’re one of the many who can work from home part of the time, you’ll need to be prepared to waste hours each week in your car. You’ll also lose a large amount of money on gas and car maintenance, as well as having to replace your vehicles more often.
If you become a road warrior, car costs make up only part of the equation. As many homeowners have learned in recent years, lenders now take a serious look at driving distance when making a determination about a loan. This especially becomes relevant while calculating a borrower’s debt-to-income ratio, with commuting costs potentially added on to the homebuyer’s monthly expenses. This often happens without the borrower even realizing it.
The Impact on Your Budget
As difficult as it may be to be stamped “Rejected” because of your commute, the lender may not be too far off track. As you conduct your home search, commuting costs may escape your attention, but once you move into that home you’d be all too aware of them. Hundreds of dollars a month in fuel alone will make a serious dent in your family budget, which could be a strain if you’ve taken on a mortgage that makes up a substantial portion of your take-home pay.
Homeowners don’t have to play a guessing game as they begin their search. The U.S. Department of Housing and Urban Development provides a handy calculator that helps homeowners determine the monthly transportation cost a person will incur each month based on daily commute. The calculator factors in the number of people in a household commuting and the cost of public transportation, weighing it against a family’s annual income.
Location, Location, Location
As those who crunch the numbers often find, moving a substantial distance from the office can take a serious toll on a family’s income. When a homebuyer factors in that extra money each month, moving away from the city may be the value a family thinks it is. When compared to the same house located within ten miles of the office, a homebuyer could find that he’s breaking even, while also freeing up valuable commute time each day that he can instead spend with his family.
If you’re in the market for a new home, don’t assume that home in the country is the best bargain. Consider the daily transportation costs to and from work and you’ll not only relieve your family budget, but you’ll have a better chance of getting the loan you’re seeking.
This blog has been provided by Union Mortgage Investment Group
6705 Red Road Suite 508 Coral Gables, FL 33143