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What do you pay in TOTAL for your house?
- Thread starter mattsk42
- Start date
We bought a small home in VA. $110k. We put $3k down. First Time Home Buyers Loan. Mo. payment a little under $700 included insurance and taxes. We have since done a refi and included a 2nd Mort. and we still are under $1k monthly.
Impossible to say - there's no standard statistic for this really. If the market falls out and you end up under water on the mortgage, well, you may be there 25 years until you can break even. If the market booms, it could be a year later and you get a gain. For a home, I wouldn't look to just "break even" at all, especially if the house you're eying is a stepping stone to another house down the line.
Many people say about five years. As Selta mentions, it is more difficult in this economy to come up with a number.
-Mike
The nice thing about owning your own home is that you can actually own it outright someday if you want to stay put. We have a modest 3 BR 2 Bath home for the wife and myself.
Ours will be completely paid off in 4-1/2 years.
We had a 15 year loan @ $736 a month. We add $300 a month extra towards the principle every payment, which cuts off quite some time from the loan.
We will be living rent/mortgage free way before retirement. Taxes, insurance and utilities only.
Rent or mortgage is usually always your biggest expense. If you can pay it down (or off completely) you've got it made.
Ours will be completely paid off in 4-1/2 years.
We had a 15 year loan @ $736 a month. We add $300 a month extra towards the principle every payment, which cuts off quite some time from the loan.
We will be living rent/mortgage free way before retirement. Taxes, insurance and utilities only.
Rent or mortgage is usually always your biggest expense. If you can pay it down (or off completely) you've got it made.
It's way too variable depending on market and the individual house.
The first house I bought I lived in for 5 years and sold for a $26K profit. (1999: 127K, 2004: 153K)
The folks (owner #2) who bought the house from me lived there for 2 years and sold for a $56K profit. (2004: 153K, 2006: 210K)
The folks (owner #3) who bought the house next lived there for 7 years and sold it for a $69K loss (2006:210K, 2013: 141K)
Gaolee
Official leathers tester and crash dummy
We bought our house in 1988, so anything we spent since then and our current mortgage payment are both completely outliers to what anybody looking for a house now could expect. Well, maybe not the amounts we spent over the last 25+ years, but we aren't done spending, since our house was a fixer and isn't completely fixed. We will have the mortgage paid off before we are done fixing all the problems the house managed to develop between when it was built and when we bought it. Plus some new ones, of course. We could have moved to the suburbs and bought a new house back then, I guess, but this is where we wanted to live and the kind of house we wanted to live in. It wasn't an entirely rational choice, but picking a house you want to live in shouldn't be an entirely rational choice.
We expect to have the mortgage paid off in a bit more than three years. Then we rent it from the county assessor and our insurance company, but at least Citibank won't keep getting anything out of us.
We expect to have the mortgage paid off in a bit more than three years. Then we rent it from the county assessor and our insurance company, but at least Citibank won't keep getting anything out of us.
You don't own a house - it owns you. However, my house is worth 2.5 times what I paid for it, so it ain't that bad.
40K down, 1600 a month for 5 years. Insurance runs about 2K a year. It's an OLD house and once we got it paid for we just let it ride for a few years but now we are in the middle of a MAJOR refurb on it. I suspect we will put in another 80K before it's all said and done, but the house is on 4 acres, can't be seen from the road and is far enough out in the sticks wifey and I will be dead and gone before urban sprawl ever gets close enough to be a problem.
There is also the fact it's already appraised at more than we gave for it, but not quite what we'll have in it when the redo is done, but down the road...
There is also the fact it's already appraised at more than we gave for it, but not quite what we'll have in it when the redo is done, but down the road...
When I lived in Texas, a developer was trying to use Eminent Domain to clear space for a shopping mall.
6jase5
Mammogram is down but I'm working manually
During the boom, a friend bought a townhouse for $399K and sold it for $800K in 13 month. Very extreme. 4 years later they walked away from their 800K house when it was valued at less than 500K after the bust.
Some people thought values would go up and up, gambled and were wrong.
We have a 1700 sq/ft ranch with 1000 sq/ft finished basement on just under 1 acre. $26k down, mortgaged $100k for 15 years. $1200 per month payment includes taxes and insurance, we have just under 4 years left on the mortgage. We did a new roof a few years after moving in ($7k) added central air and a new furnace ($2k) and I upgraded my garage for my liking with a lift, air compressor, welder etc....
I'm handy, so household repairs are handled by me or any one of my contractor friends.... we use the barter system, I keep their trucks running and they fix things here that need fixing.
I'm handy, so household repairs are handled by me or any one of my contractor friends.... we use the barter system, I keep their trucks running and they fix things here that need fixing.
On average, never. Let me explain why I say this. Suppose you buy a house for X, and housing prices go up. When it's time to move, you can sell it for Y. But during that same time period, the price of your next house has gone up by the same amount -- on average. So your Y has to go into your next house.
Now, that's the simplistic view. The more complicated view is that you have some fixed costs and some variable costs. When you buy the house, you pay M to the broker (around 6 percent), a fee to originate the mortgage, various other closing costs, moving, and any initial renovation needed to make the house into your own little place. Then you pay N per month for X months of ownership. When you sell, your effectively monthly cost is (M + N*X)/X i.e., you spread your fixed costs over the duration of ownership. "Break even" is when that amount is equal to what you would have paid in rent.
But it gets even more complicated. If you could rent for less than that amount, then you could invest the difference in something like stocks or even real estate. There are ways of investing in real estate with actually owning property, via exchange traded funds that track the real estate market. It's worth noting that most people are satisfied renting something that is much smaller than what they would want to own, and that they buy less stuff when they are renting. Depending on where you're at in life, an advantage of renting is that you can pick up and move just like that. I have a friend who's a bachelor and doesn't want to own a car. He can just rent an apartment close to where he works, even in a dense urban area, and is not even tied down to living in the US.
Ah, the National Association of Realtors. They don't have an agenda, do they?
Of course they do, I'm not a big supporter, myself. I am a member, basically because I have to be.
That said for many, ownership make more sense than renting.
Those sorts of case are few and far between. And outrageous BTW. The SC really screwed the pooch on that case (dont remember the name) about 12 or so years ago. Really opened the door for that kind of nonsense.
I still have WAY more stability and predictability than the typical renter.
Rubbish.
In that scenario, many people have also seen an increase in income etc, allowing them to do the move up buy. And then later in life, sell that home and "downsize" when the kids are gone.
Another scenario, I could sell my modest TH outside of DC, that I bought in 2001 now for more than twice what I paid for it, pay off the note, and put down over 50% on a purchase of a single family home with a pool in Phoenix. I'd still have money left over, and a small mortgage payment.
That's the benefit of buying cheap, a large down payment, not cashing out the equity, and holding onto it for a long time, and seeing significant appreciation. Yeah, ownership is a good thing, if you ask me.
That's why I put the word "average" in my comment. There will always be scenarios where somebody does better than average. Also, your income isn't relevant to whether you break even on an investment or not.
Look, I'm not arguing against home ownership. My family owns our home. All I recommend is for each person to understand how the numbers actually work. And to be skeptical of slogans and simplistic arguments.
I recently visited Phoenix. It seemed like half the city was abandoned.
Some people get into the constant renovation trip.. Another new kitchen? Didn't you just do the bathroom last years. And then there's some folks that can't change a light bulb.
Being able to do even light plumbing and maintenance can make a big difference. And things like cutting the grass can be a source of satisfaction.
