Are You Going To Make Money On Your Home?
Aug 04, 2009 in Mortgage
Is home buying a good investment?
You can make money on a home purchase if you do it right. Even in this mortgage melt down market, it is possible. Their is probably not very many people talking about it. I think you still can get it done.
I am going to give a example of this. I am going to use the current market as an example of this. First we need to get all the information as far as the cost of purchasing a home. We want to get all the information for this.
In this example we are going to need to give FHA numbers. We are going to need to use FHA numbers because the majority of loans right now are FHA loans.
In my example the house price is $100,000 dollars. In order to get a loan you are going to need a 3 % down payment. That is going to be $3000 dollars.
Some other cost on the loan will be the closing cost. You can expect to pay about twenty five hundred dollars for the closing cost. Or the cost associated with getting a mortgage. if we add this with the down payment we are looking at a total of five thousand five hundred dollars.
But are we really down five thousand five hundred dollars. We need to take in account the eight thousand dollar government credit they will be given to the end of the year.
I believe we have a total of about three thousand dollars. We need to account for our home loan payment all so. This is going to be around eight hundred and fifty dollars. But if we are going to live in a house we are going to have a payment. This will either be rent
So we are now up $3000 so far in our investment. I do want to consider this a long term investment. So I want to see were we might be in 10 years.
Since we are looking at this house purchase as long term We should expect the home property to be double the price we bought the home for. So we can add that to the $3000 we had all ready should be up.
Now their are not very many investments that can do something like this in 10 years. We are going to be up about $103000 in the full ten years. That is not a bad investment. Since we were up from the very first day!