If you're struggling to pay your mortgage, property taxes, or maintenance costs, it's essential to reassess your home's affordability. Ignoring the signs of financial strain can lead to debt accumulation, damaged credit, and even foreclosure. Reviewing your budget and exploring non-debt options can help you make an informed decision about your home's future. Start by calculating your home's holding costs
Based on federal consumer protection law and HUD/CFPB public guidance · Last reviewed July 2026
The Direct Answer
To determine if you can still afford your home, calculate your monthly holding costs, including your mortgage payment, property taxes, insurance, maintenance, and utility bills. Compare this total to your net income to gauge affordability.
For example, if your monthly holding costs are $2,500 and your net income is $4,000, your home expenses account for 62.5% of your income, which may be unsustainable. Consider seeking guidance from a housing counselor or financial advisor to review your budget and explore options.
Do not ignore signs of financial strain, as it can lead to debt accumulation, damaged credit, and even foreclosure. Seek help immediately if you're struggling to pay your mortgage or other home-related expenses
Understanding Holding Costs
Breaking Down Your Expenses
Your home's holding costs include more than just your mortgage payment. Factor in property taxes, insurance, maintenance, and utility bills to get a comprehensive picture of your expenses. For example, if your property taxes increase, your holding costs will rise, even if your mortgage payment remains the same.
Property taxes: vary by location, but typically 0.5-2% of your home's value annually
Insurance: premiums depend on factors like location, home value, and coverage level
Maintenance: budget 1-3% of your home's value annually for repairs and upkeep
Non-Debt Options
Exploring Alternatives to Debt
Before considering debt consolidation or other borrowing options, explore non-debt alternatives to manage your home's holding costs. This might include reducing your expenses, such as by canceling subscription services or negotiating a lower interest rate on your mortgage. You can also consider increasing your income by taking on a side job or renting out a spare room.
Seeking Professional Guidance
Getting Expert Help
If you're struggling to manage your home's holding costs, consider seeking guidance from a housing counselor or financial advisor. These professionals can help you review your budget, explore non-debt options, and develop a plan to get back on track. You can find a HUD-approved housing counselor in your area by visiting the HUD website
Avoiding Common Pitfalls
Red Flags to Watch Out For
When exploring options to manage your home's holding costs, be cautious of predatory lenders or debt consolidation scams. Be wary of any offers that seem too good to be true or require upfront fees. Always research the company and read reviews before committing to any service.
Predatory lending practices, such as high-interest loans or hidden fees
Debt consolidation scams that promise quick fixes but deliver more debt
Get Back on Track
Start by calculating your home's holding costs and exploring non-debt options. If you're struggling to manage your expenses, consider seeking guidance from a housing counselor or financial advisor.
The 28/36 rule suggests that your housing expenses, including mortgage payments, property taxes, and insurance, should not exceed 28% of your gross income, and your total debt payments should not exceed 36% of your gross income. While this is a general guideline, it can help you gauge the affordability of your home.
Can I deduct my property taxes and mortgage interest on my tax return?
Yes, you may be able to deduct your property taxes and mortgage interest on your tax return, which can help reduce your taxable income. Consult a tax professional to determine the eligibility of these deductions and to ensure you're taking advantage of all available tax savings.
How can I reduce my property taxes?
To reduce your property taxes, start by reviewing your property tax assessment to ensure it's accurate. You can also consider appealing your assessment if you believe it's too high. Additionally, some states offer property tax exemptions or deductions for certain groups, such as veterans or seniors. Contact your county tax assessor's office to learn more about available options.
What is a housing counselor, and how can they help me?
A housing counselor is a professional who specializes in helping homeowners manage their finances and explore options to avoid foreclosure. They can help you review your budget, develop a plan to get back on track, and provide guidance on non-debt options. You can find a HUD-approved housing counselor in your area by visiting the HUD website.