The only thing that I will add to this is...
If possible - always add 'ExtraPrinciple' to the monthly payment - when you are buying. (Somethng like $50 - $75 each month)
It will save you heaps in the beginning in Interest, and in the long term, you will pay off the mortgage way ahead of the '30 years' that is what they are usually set up for.
I know that I did this, and paid off a $35,000 home in 16 years. Drove the mortgage company nuts - as they lost all that Interest... but I did it anyway.
Oh - 'experts' will probably tell you it isn't worth it to do this, but I never did listen to 'experts'. *wide grin*
To help me visualize the correct amount to add each month, I created an Amortization Schedule spreadsheet with an extra column titled 'Extra Principal'. I then ran the numbers to determine the right amount of Extra Principal to send in with each payment.
Regards,
Jim TX
Rent vs. Buying a house
by Elsewhere 44 Replies latest jw friends
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Jim_TX
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cruzanheart
Elsewhere, I think you're ready to buy a house and I think you'll appreciate the tax break you'll get from deducting all that lovely interest. Just make sure you pick your area well so that the value of the house doesn't go down.
I think you'll enjoy the experience and, if you don't like it, you can sell the house and move back to an apartment.
Nina
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Mrs.Congeniality
I am a loan officer so hopefully I can help with your questions. Depending on where you live will determine how much property is appreciating each year. One way to find out how much home owners ins. will be call an insurance company and ask them how much it would cost to insure a house for $(decide how much you want to pay for a house) Then call a title company and they can let you know how much average taxes are per month depending on where you want to buy. There are so many products out there for people to get into homes with absolutely no money down, interest only, good credit or bad credit. I helped a man get into a house with no money down not a penny, his mid credit score was 570 and he had no current credit ie:(no credit cards,auto payments,etc) all his credit was old and mostly collections. So there are many products for all types of people. What I do is prequalify people and give them a rough idea what they can afford and their payments. Also at tax time every year you get to write off all of the interest you paid. Another couple I helped bought a house and normally they get $3000 back in taxes, this year they are getting $9000 back. (they bought a $415,000 house.)It is a win win situation.If you have any more questions let me know. I hope I helped. -
Euphemism
Just a couple of thoughts re taxes:
1. If the alternative to buying a house is investing more in your 401(k), that has tax benefits as well.
2. To get the interest deduction, you have to itemize, which means you lose the standard deduction. The mortgage interest deduction will be more than the standard deduction (especially if you're single), but there's still an offset there.
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RubaDub
If your home does not appreciate enough to lock in a fixed rate at the end of the interest only term, you will loose your home.
Lovelylil ...
I don't get that statement ???
Why would you loose your home at the end of the interest only term ???
We got an interest only loan that converts to an adjustable in 5 years. We have no intention of being in the house more than 3 or 4 years anyway.
With the high price of homes here in S. Florida (average price near $400,000 now), it seemed like it made more sense in our case since we are using the money that we otherwise would be paying to the mortgage company to make some improvements on the home.
Rub a Dub