Cut those Housing Costs
It is a common occurrence for smart shoppers to wait for a deal before spending money. Seeing something 35% off makes the idea of buying something more enticing and intelligent. This is due to the potential bargain they would be getting on that purchase. The same can be applied to renting and getting a mortgage.
How it works
Leaseholders who are genuine about lowering their cost of housing should consider their options heavily. For example, let’s assume a person buys a $200,000 home with 3.5% down payment on a 4.5% FHA mortgage for 30 years. The total house payment would be approximately $1,508 per month. However, once you consider the equity build-up due to amortization, the accounting technique used to lower the value of a loan or an asset over a set period of time, a monthly appreciation estimated at 2% annually for this example. Then there are tax savings and paying maintenance that a tenant wouldn’t be required to do. The net cost of housing is $772 a month.
This is almost half of the full mortgage payment. If that person paid $1,750 a month in rent, their rental costs would be about $978 higher than owning the home. That's more than $11,000 in the first year alone, more than the required down payment of $7,000. Owning a home is the largest investment most people make, and assuming 2% appreciation and normal depreciation, the $7,000 down payment for this home would grow to $58,837. Check out what your own housing costs might look like! Head to Rent vs. Own or contact your real estate professional.
Authored by:
Mario Gonzalez
Navy to Navy Homes
4540 Southside Blvd., Ste 702
Jacksonville, FL 32216
904-900-4766
