Excuse the simple terms and my lack of knowledge about finances before hand.
Also this isn't with inflation and/or the price of my house going up.
So.. I have been looking at buying a house and I'm trying to justify the cost and trying to see if its actually worth buying.
House is $450,000 - $50,000 down payment.
Mortgage interest is about 4%~
So I'm paying $2,100~/month for 25 years.
Said house went from $450,000 to $630,000 just because of interest.
Now that I own a house I'll have to pay:
Electricity/heat/water: $250/m x 12 x 25 = $75,000
Property tax: $4,000 x 25 = $100,000
Repairs: $50/m x 12 x 25 = $15,000
Say the price of my house doesn't go up (for unforeseeable circumstances in the next 25 years) then I've wasted $370,000.
Money made per month $5,000
Living in a house
Misc: $300
Property tax: $340
Food: $300
Electricity etc: $250
Mortgage: $2,100
Repairs: $50
Gas: $100
Total: $3440/month
I'll save maybe $1,400/month
Total Saved and Price of house within 25 years = $420,000 + $450,000 = $870,000 - Interest = $690,000 to retire with in 25 years.
OR
Renting an all-inclusive apartment
Rent: $1,200/m
Misc: $300
Food: $300
Gas $100
Total: $1,900/month
I'll save maybe $3000/month
Total Saved in 25 years with current savings = $950,000 to retire with in 25 years.
It seems to me that it'll be better to rent than to own unless my house went up in price by $260,000 and there isn't any major repairs needed to be done.
What do you think?
Also this isn't with inflation and/or the price of my house going up.
So.. I have been looking at buying a house and I'm trying to justify the cost and trying to see if its actually worth buying.
House is $450,000 - $50,000 down payment.
Mortgage interest is about 4%~
So I'm paying $2,100~/month for 25 years.
Said house went from $450,000 to $630,000 just because of interest.
Now that I own a house I'll have to pay:
Electricity/heat/water: $250/m x 12 x 25 = $75,000
Property tax: $4,000 x 25 = $100,000
Repairs: $50/m x 12 x 25 = $15,000
Say the price of my house doesn't go up (for unforeseeable circumstances in the next 25 years) then I've wasted $370,000.
Money made per month $5,000
Living in a house
Misc: $300
Property tax: $340
Food: $300
Electricity etc: $250
Mortgage: $2,100
Repairs: $50
Gas: $100
Total: $3440/month
I'll save maybe $1,400/month
Total Saved and Price of house within 25 years = $420,000 + $450,000 = $870,000 - Interest = $690,000 to retire with in 25 years.
OR
Renting an all-inclusive apartment
Rent: $1,200/m
Misc: $300
Food: $300
Gas $100
Total: $1,900/month
I'll save maybe $3000/month
Total Saved in 25 years with current savings = $950,000 to retire with in 25 years.
It seems to me that it'll be better to rent than to own unless my house went up in price by $260,000 and there isn't any major repairs needed to be done.
What do you think?