Jul 21, 2011

Price vs Cost of Buying a Home

The cost of buying a home is so vastly different that the cost of buying almost all our purchases that most people don't really comprehend the cost vs value analysis. The Price and the Payments (cost) of a home can be dramatically different because of financing.

Here is an example:
A $200,000 home purchased with a 30-year fixed rate loan @ 4.625% = $1028 per month today. If you bought that same home at a lower price of $180,000 but rates have risen to 6.5%, it would cost you $1137 per month. In other words, paying less could end up costing more if mortgage rates rise. Use the on-line mortgage calculator on the right and don't confuse Price with Payments. [where: 75230]

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