There is a phrase in the real estate industry that has been widely used for years. It's connotation is meant to be humorous but it does have a serious, underlying tone. "Drive until you qualify" means that the farther away from a major city in which you purchase a home, the better your chances of being able to qualify for a monthly mortgage payment low enough to afford.
Generally speaking, when new home communities spring up on the very outskirts of town, they cannot charge the same pricing for a home located in the heart of a major city. Homeowners won't have the shopping centers, jobs, and infrastructure directly around them if they decide to move out to extreme boundaries meaning they will need to commute in to major areas for most of life's necessities. Higher commute costs will dramatically cut in to an individuals monthly budget. This being the case, home builders must lure buyers to these properties with lower pricing and affordability. But just how much are you saving as a homeowner being able to afford a lower monthly payment yet expending hundreds of extra dollars per month on commuting costs?
Using the following data and statistics from AAA as well as an on-line commuter cost calculator I reached some startling results:
1. Average daily round trip commute distance: 40 miles
2. Average monthly days worked: 20 days
3. Average MPG on a vehicle: 20 mpg
4. Current National Gas Price average: $2.77
5. Average vehicle size: Mid-Size to Intermediate
6. Average monthly car payment: $250.00
Total Estimated monthly cost of commuting: $827.20
Total Estimated yearly cost of commuting: $9,926.40
These estimated total costs factor in not only the above statistics, but also normal wear and tear on vehicles, higher insurance premiums for high mileage drivers, routine maintenance, oil changes, and total lost wage earning potential from time spent traveling. If you're like me, these numbers should be startling and make you second guess purchasing that home far out from the boundaries of where you work and play. You may save a few hundred dollars per month on your mortgage by living farther out of the city but these numbers help make it more clear just how much more you're actually spending overall.
There are also other factors when deciding to purchase a home which will require an extensive commute. You will most assuredly get more home and more land for your dollar in these outlying areas. If you have a large family and are in need of space to stretch out then you may have no choice but to shop in these farther out reaches depending upon your budget. Maybe you and your family enjoy being outdoors and living outside of the city boundaries allows you a quicker escape to your favorite weekend trails, lakes, and mountain get-aways.
At the end of the day, what you really need to factor in to your decision on purchasing a property that will require a long distance daily commute is time. Time is our most precious commodity. You need to ask yourself if having a slightly larger home or a bigger lot size is really worth the extra time you will spend on the road each and every week away from your friends, family, and activities that you could be enjoying.
Finding the right home for you requires thought, research, and help from the experts at Zion Realty. Contact us today for professional guidance on how and where you should buy your next home.