The two-year housing decline is worsening

[GaryC 7]

How about in my circumstances? I plan to retire to PI when I reach 62. (13 years from now) I rent for $725/month. There are nice houses here that can be bought for $80,000 that are equivalant to where I live now. I talked to the bank and I can get a mortgage for 30 years for about $800/month INCLUDING taxes and insurance. It seems to me that I would be money ahead if I bought a house and then sold it 13 years from now when I move. I don't know enough about all this to really work out the numbers. Someone?

In the current market conditions, the house price will likely go down.

Dan, the house prices will NOT go down where he lives. In that part of the country,

the prices never went up and are already as low as can be.

They probably wont go up either.

I agree.

But I would have the equity from 12 years of payments, yes?

[PlatyPius 5]

Yes.

[AnaAndDaniel 0]

err assuming he can sell it at least as much as he bought it for. which should be the case.

Daniel

:energetic:

[Dan J 277]

How about in my circumstances? I plan to retire to PI when I reach 62. (13 years from now) I rent for $725/month. There are nice houses here that can be bought for $80,000 that are equivalant to where I live now. I talked to the bank and I can get a mortgage for 30 years for about $800/month INCLUDING taxes and insurance. It seems to me that I would be money ahead if I bought a house and then sold it 13 years from now when I move. I don't know enough about all this to really work out the numbers. Someone?

Let's calculate it. How much are you willing to spend on a down payment?

I will be using FHA and have a 5% down payment. The interest rate at this moment is about 7%.

Unless you can rent the same house you are looking at buying (at $80,000) for $400 a month, you are better off buying if you plan to sell in 13 years. However, the calculator does not take into effect the pricing changes due to the housing bubble. Which will probably affect your area somewhat, but not as dramatically as other places.

[GaryC 7]

So renting for 12 years=nothing back

Buying for 12 years=what I paid in minus interest, taxes and upkeep. (assuming the price of houses do not go down over the 12 years)

So if the rent is more or less equal to the mortgage payment, taxes and insurance then I am money ahead by buying?

[mawilson 2,133]

How about in my circumstances? I plan to retire to PI when I reach 62. (13 years from now) I rent for $725/month. There are nice houses here that can be bought for $80,000 that are equivalant to where I live now. I talked to the bank and I can get a mortgage for 30 years for about $800/month INCLUDING taxes and insurance. It seems to me that I would be money ahead if I bought a house and then sold it 13 years from now when I move. I don't know enough about all this to really work out the numbers. Someone?

Let's calculate it. How much are you willing to spend on a down payment?

I will be using FHA and have a 5% down payment. The interest rate at this moment is about 7%.

Let's see.

5% down = $4,000

$76,000 mortgage, 30 years, 7% interest

Your monthly mortgage payment will be $506.

If you can pay $220 extra each month (for a total of $726/month), you will own the place in 13.5 years.

Edited September 12, 2007 by mawilson

[Dan J 277]

How about in my circumstances? I plan to retire to PI when I reach 62. (13 years from now) I rent for $725/month. There are nice houses here that can be bought for $80,000 that are equivalant to where I live now. I talked to the bank and I can get a mortgage for 30 years for about $800/month INCLUDING taxes and insurance. It seems to me that I would be money ahead if I bought a house and then sold it 13 years from now when I move. I don't know enough about all this to really work out the numbers. Someone?

Let's calculate it. How much are you willing to spend on a down payment?

I will be using FHA and have a 5% down payment. The interest rate at this moment is about 7%.

Unless you can rent the same house you are looking at buying (at $80,000) for $400 a month, you are better off buying if you plan to sell in 13 years. However, the calculator does not take into effect the pricing changes due to the housing bubble. Which will probably affect your area somewhat, but not as dramatically as other places.

Additionally, you may end about $10,000-$15,000 by the time you sell. Thats after you sell the house to pay the remaining mortgage.

[GaryC 7]

How about in my circumstances? I plan to retire to PI when I reach 62. (13 years from now) I rent for $725/month. There are nice houses here that can be bought for $80,000 that are equivalant to where I live now. I talked to the bank and I can get a mortgage for 30 years for about $800/month INCLUDING taxes and insurance. It seems to me that I would be money ahead if I bought a house and then sold it 13 years from now when I move. I don't know enough about all this to really work out the numbers. Someone?

Let's calculate it. How much are you willing to spend on a down payment?

I will be using FHA and have a 5% down payment. The interest rate at this moment is about 7%.

Let's see.

5% down = $4,000

$76,000 mortgage, 30 years, 7% interest

Your monthly mortgage payment will be $506.

If you can pay $220 extra each month (for a total of $726/month), you will own the place in 13.5 years.

I figure $100/month taxes and $100/month insurance. That gives me $700/month payment. My rent is $725/month. At that rate I could throw in an extra $100/month on the mortgage. As long as I break even or better I would think that buying is better than renting, at least in my mind.

[mawilson 2,133]

So if the rent is more or less equal to the mortgage payment, taxes and insurance then I am money ahead by buying?

Absolutely.

[PlatyPius 5]

How about in my circumstances? I plan to retire to PI when I reach 62. (13 years from now) I rent for $725/month. There are nice houses here that can be bought for $80,000 that are equivalant to where I live now. I talked to the bank and I can get a mortgage for 30 years for about $800/month INCLUDING taxes and insurance. It seems to me that I would be money ahead if I bought a house and then sold it 13 years from now when I move. I don't know enough about all this to really work out the numbers. Someone?

Let's calculate it. How much are you willing to spend on a down payment?

I will be using FHA and have a 5% down payment. The interest rate at this moment is about 7%.

Let's see.

5% down = $4,000

$76,000 mortgage, 30 years, 7% interest

Your monthly mortgage payment will be $506.

If you can pay $220 extra each month (for a total of $726/month), you will own the place in 13.5 years.

I figure $100/month taxes and $100/month insurance. That gives me $700/month payment. My rent is $725/month. At that rate I could throw in an extra $100/month on the mortgage. As long as I break even or better I would think that buying is better than renting, at least in my mind.

Definitely.

It would be YOUR house. You could paint it purple if you wanted. You could add a sunroom, build a garage, put a cupola on it....whatever you wanted. That's one of the main benefits of buying... it's YOURS to do with as you will. Of course, since you would be selling in 12-13 years, you wouldn't want to go too crazy... lol

Peoria house prices shouldn't sink much in the next 13 years, and should hopefully go up a bit.

Making the extra $100 payment each month would give you enough - when you sell - to buy a plantation in PI and have a nice retirement.

[mawilson 2,133]

I figure $100/month taxes and $100/month insurance. That gives me $700/month payment. My rent is $725/month. At that rate I could throw in an extra $100/month on the mortgage. As long as I break even or better I would think that buying is better than renting, at least in my mind.

If you throw in an extra $100/month, after 13 years your balance will be $34,885,

which means you will have saved $41,115 ($76,000 - $34,885), assuming the house

still costs $80,000 13 years from now.

[AnaAndDaniel 0]

How about in my circumstances? I plan to retire to PI when I reach 62. (13 years from now) I rent for $725/month. There are nice houses here that can be bought for $80,000 that are equivalant to where I live now. I talked to the bank and I can get a mortgage for 30 years for about $800/month INCLUDING taxes and insurance. It seems to me that I would be money ahead if I bought a house and then sold it 13 years from now when I move. I don't know enough about all this to really work out the numbers. Someone?

Let's calculate it. How much are you willing to spend on a down payment?

I will be using FHA and have a 5% down payment. The interest rate at this moment is about 7%.

Let's see.

5% down = $4,000

$76,000 mortgage, 30 years, 7% interest

Your monthly mortgage payment will be $506.

If you can pay $220 extra each month (for a total of $726/month), you will own the place in 13.5 years.

I figure $100/month taxes and $100/month insurance. That gives me $700/month payment. My rent is $725/month. At that rate I could throw in an extra $100/month on the mortgage. As long as I break even or better I would think that buying is better than renting, at least in my mind.

Definitely.

It would be YOUR house. You could paint it purple if you wanted. You could add a sunroom, build a garage, put a cupola on it....whatever you wanted. That's one of the main benefits of buying... it's YOURS to do with as you will. Of course, since you would be selling in 12-13 years, you wouldn't want to go too crazy... lol

Peoria house prices shouldn't sink much in the next 13 years, and should hopefully go up a bit.

Making the extra $100 payment each month would give you enough - when you sell - to buy a plantation in PI and have a nice retirement.

As long as he doens't buy in a HOA (home owners association). They can get finicky about such things. Especiall the color purple.

Daniel

:energetic:

[GaryC 7]

Thanks guys, I was never very good figuring out mortgages. I was told by the bank that they would be glad to make me the loan at any time but they suggested that I wait until winter. They said the market always softens then and I could get a better deal on a house.

[mawilson 2,133]

It would be YOUR house. You could paint it purple if you wanted.

This coming from the guy who painted his house Magenta?

[Dan J 277]

Thanks guys, I was never very good figuring out mortgages. I was told by the bank that they would be glad to make me the loan at any time but they suggested that I wait until winter. They said the market always softens then and I could get a better deal on a house.

It will likely be "softening" for the next few years. Thats why its hard to say if you will be better off. You may not get what you paid for your house when you sell it.