""Let's take this scenario for example: let's say you're paying $2000 a month rent here in New York and you stay here for 5 more years. That's $24,000 a year in the toilet or $120,000 over 5 years."
OK -- now for the real math.
Paying $2,000 a month for 30 years at 6% yields a "present value" (price of the house that these payments could support) of $333,588. Assuming NO downpayment, At the end of five years (to be consistent with the example above), you will have paid $97,000 in interest and paid down $23,000 in principal. Assuming nothing has changed in the market, you will have $23,000 in equity in the house. Well, that's something, I suppose. But you will have thrown $97,000 out the window in interest payments. Of course, if you then tried to sell the house for what you paid ($333,588), you will pay a 6.0% commission ($20,015), leaving you with all of $3,000 in net "equity" to put into your pocket. Big whoop. For that $3,000, built up over 5 years, you have locked yourself into a mortgage, into a location, and lost all flexibility of change of job or change of geography. What if prices go down? Opps . . . . that $3,000 doesn't look very good after all now, does it.
Renters may be throwing their money out the window in rent payments, but house owners do the very same thing for a very long time as well -- only in their case its called "interest" on the debt they've taken on.
I will be happy to help you find the appropriate financing you need to purchase one of the great buys in this area. Also please visit http://www.Hope4HomeBuyers.ORG to look at listings and full color home tours from local realtors. You can sign up for listing book to be sent new home information as it hits the market.
If you are over the age of 62, you may qualify for our Reverse Mortgage Purchase Program where you can buy a home without a mortgage payment. Contact us today and we will have you pre-qualified in minutes.
First Capital Lending
Many people in your position are taking this course because they see tha advantages of purchasing now and taking advantage of the low prices, large inventory, and unbelievable low interest rates.
Financing can easily be arranged.
We just presented an offer on an 2001 constructed home, 3/2/2 in a very nice location, with an asking price of $69,900. If you would like to find out more aout these kinds of opportunities we would be happy to hear from you.
Susan & Bill
Michael Saunders & Company
If I can help you any further, please contact me.
Century 21 Princeton Properties