In today's real estate market, $200,000 will buy a lot more home than it did just a couple of years ago -- almost a third more, according to data from the Case-Shiller 20-city home price index. But if you've eyeing that empty McMansion down the block, just because you can now afford to buy one, doesn't mean you can still afford to own one.In fact, while home prices have fallen sharply, some other costs associated with home ownership haven't dropped an inch. So if you're trying to figure out just how much house you can afford, be sure to factor in these three other costs. Property Taxes
Your local government usually figures out the tax rate by dividing the amount of taxes it needs to collect by the overall worth of all of the homes in your area. The resulting rate is typically assessed as a dollar amount per $1,000 of your home's value. If all of the homes in your area have declined by the same amount as yours, then your share of the overall tax budget will remain the same. That means that even though your home is worth less, you could end up paying the same in property taxes if your town or county has to increase the tax rate to make up for the shortfall. States and counties across the US are grappling with raising local property taxes to make up for other budget shortfalls as the recession deepens.
The cost of homeowner's insurance varies widely from state to state, and even from town to town, but most policies are based - in part - on the square footage of your home. The cost of insuring your worldly belongings won't necessarily change if you choose a bigger home, but the part of your policy that covers rebuilding your home will cost more. BankingMyWay's Insurance Center offers quotes on homeowner's policies from companies such as Travelers ( TRV), Allstate ( ALL) and Nationwide ( NFS).
A bigger home generally means bigger maintenance costs -- a common rule of thumb estimates regular maintenance at 1.5% to 4% of a home's value. But the cost of repairing a roof or replacing a furnace has risen with inflation even as home values have plummeted (housing costs were up 2.4% during 2008, according to data from the Bureau of Labor Statistics). Making sure you properly budget for regular maintenance such as cleaning and yard care, and set aside enough money to cover bigger, one-time expenditures, such as replacing your furnace, will be critical for your long-term financial health.