Understanding the Cost of Owning a Victorian-style Home

When considering the purchase of a Victorian-style home, especially within the context of modest incomes, it is crucial to understand the financial realities involved. This guide aims to help individuals like you determine if purchasing a Victorian-style home is feasible, given your current earnings.

Financial Planning and Savings

First, it is essential to determine how much you are saving each year. If you make $18 per hour and your partner makes $14 per hour, your annual earnings would be $37,440 for you and $26,280 for your partner, totaling $63,720. From these earnings, you need to identify how much is realistically set aside for savings each year. If you each save 10% of your gross salary, the total yearly savings would be $6,372.

Types of Victorian-style Homes and Their Costs

The cost of a Victorian-style home varies greatly depending on the region. As highlighted in your query, costs can range from $50,000 in Maine to over $1.4 million in California, and even more in London. The primary driver of these differences is the real estate market and property taxes in each location.

For example:

Maine: 74 Lincoln St, Dexter, ME 04930 (Zillow) - Listed around $50,000 California: 1328 York St, San Francisco, CA 94110 (MLS 40887375) - Listed around $1,400,000

These prices reflect the historical and often decorative value of Victorian-style properties, but they also include maintenance and sometimes renovations.

Considerations for Older Victorian-style Homes

Historic Victorian homes may require significant updates and renovations. For instance, single-pane windows may need to be replaced with energy-efficient windows, outdated electrical systems may require upgrades to modern standards, and any plumbing issues will need to be addressed. Such updates can be costly.

Some Victorian homes might not be in optimal condition, necessitating significant work before becoming move-in ready, often referred to as "fixer-uppers." These homes are significantly less expensive but might have underlying issues that need to be addressed.

Loan Options and Down Payment

To further determine the feasibility of purchasing a Victorian-style home, consider loan options and the down payment required. A 5% down payment on a first-time homebuyer loan can change your situation dramatically. With a combined annual savings of $12,744, you can save for a 5% down payment in approximately 3 years if you are in an area with lower property prices, such as the Midwest.

However, if you live in an area with higher property prices, such as the coastal regions of the United States, it may take closer to 10 years. This timeline can be adjusted based on your current savings rate and the specific home you are considering.

Working Together for Homeownership

If both partners are contributing to the financial goal, it is essential to combine your incomes and savings. Two individuals saving 10% each of their gross salaries would mean a combined annual savings of $12,744. This combined effort can significantly reduce the time required to save for a down payment.

Additionally, when qualifying for a home loan, your credit ratings, debt-to-income ratio, and employment history play a crucial role, directly influencing the loan amount and interest rate. Working together to ensure both of you are creditworthy and have stable incomes will help you achieve your goal faster.

Conclusion

While it is challenging to give a definitive timeline without specific details, with careful planning and combined efforts, it is possible to purchase a Victorian-style home within a reasonable timeframe. Understanding the intricacies of the real estate market, financial planning, and the condition of the home you are interested in can make the process smoother. Keep in mind the importance of a solid financial strategy and realistic expectations to make your dream of homeownership a reality.