When all is said and done, in 30 yrs, how much does it really cost to own a home that cost 100k?

Question

Say you have xamount to put down (say 50k if an amount is important for whatever reason) so you borrow 100k.

How much in 30 years is that home costing you? (30yr fixed)

Let's just use the average $3500 year tax and $2,000 year insurance.

Will that 100k loan cost you about $360,000 in 30 years? Are these figures I'm seeing in mortgage calculators right?

Answer 1

If you still have the copies of your closing documents when you bought your house, check the Truth-In-Lending Disclosure Statement. These is how the calculation goes:

-On the first column it'll show the "Annual Percentage Rate"

<the cost of your credit as yearly rate>

-Second column "Finance Charge"

<the dollar amount the credit will cost you>

-Third column "Amount Financed

<the amount of credit provided to you or on your behalf

-Fourth column "Total of Payments

<the amount you will have paid after making all payments as scheduled.

Answer 2

First, I'll give you the taxes, but if your paying 2k for a 150k home policy, I have a bridge to sell you as well.  monthly payments do not include insurance and taxes, but totals do

100k, 5%, 30yr fx, 537/mo, total 358,376

100k, 6%, 20yr fx, 717/mo, total 337,063

100k, 7%, 15yr fx, 899/mo, total 326,909

The point here is why would you amortize 100k over 30 years.  this point is exaggerated as 15 yr rates are never higher than 30, but it proves the point that rate isn't everything, term is just as important.  Also, don't forget about your irs obligation, yeah, I know, more taxes, but you can write off interest paid with a mortgage so, in reality, your really writing off taxes and interest for the first 5-10 years on all the loans, hope this helps

Answer 3

Your figures look pretty legitimate. Your loan will cost 3 X or 3.5 X of the Mortgage over 30 years. Your insurance and taxes are understated by failing to account for inflation.

Your cost figures are not simply the summation of costs because it depends upon the general rate of inflation and the specific inflation in property value. (Yes...properties long ago appreciated in value and will do so again after a few years)

  The issue further fails to account for your interest deductions on tax returns. This value depends upon your income tax bracket.

    All in all if you are looking to compare and contrast a real estate purchase to long term property leasing, you will be better off through purchasing a home.

  Good luck.