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How To Pick Where You Live Based on Your Budget – GOBankingRates

Money / Financial Planning

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Money / Financial Planning

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You’re looking to start over in a new town, but you’re not sure where to move. As a budget-minded person, you want to choose somewhere that checks your main boxes — i.e., city vs. country, warm vs. cold climate — that you can also afford.

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The cost of living in your desired new town is a must because a dollar doesn’t stretch nearly as far in some areas as others. For example, the median gross rent in Los Angeles is $1,523 per month, but it’s nearly half that at $735 per month in Cleveland, according to the U.S. Census Bureau.

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This is especially important if you’re an entrepreneur or are planning to keep your current remote job, as your salary won’t necessarily be adjusted to match the cost of living in your new area.

Here are a few considerations to weigh when trying to choose a new hometown based on your budget.

Mortgage Affordability

If you’re thinking about buying a new home before moving to your new town or shortly after, it’s important to make sure you can actually afford to do so. Online mortgage calculators aren’t always accurate, so it’s best to contact a professional.

“Before you proceed with anything at all, you should talk with a lending institution to find out the amount they are ready to lend you and the conditions,” said Elena Jones, a former financial coach and co-founder of FinanceJar.

She said most lenders will require you to commit no more than 31% of your income to housing costs.

“Your debt burden is the subsequent factor they take into account,” she said. “This would include any monthly liabilities, like a car loan, college loans, lines of credit, cash advances and others.”

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Property Taxes

Another factor to consider if you’re thinking about purchasing a home in your new town, property taxes can seriously increase your monthly payment.

“Property tax rates can vary widely, even among towns that share a common school district,” said Jeremy …….

Source: https://www.gobankingrates.com/money/financial-planning/how-to-pick-where-you-live-based-on-your-budget/

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