Which is best $300K home with tax of $2500/yr vs. $225k home with tax of 4800/yr?Have 130K down to 15yr loan.?

Question

Between $300K home with tax of $2500/yr vs. $225k home with tax of 4800/yr.Have 130K down to 15yr loan. Best?

I'm deciding between on moving between two cities. Homes viewed in the two areas average like this. Town A (Columbus, OH):home $225k, avg taxes $4800/yr. Town B (Raleigh, NC):home 300k, avg taxes $2500/yr. Hoping to make the best investment for 15 years. Which option would be best from an economical standpoint, considering I have 130K to put down on either home. Is it better to pay higher taxes or higher mortgage in the long run? Which option would save us more.

The cities in question are Columbus,OH and Raleigh, NC? The lower priced homes with higher tax are in OH. Checking schools and other important information as well.

Answer 1

location, location, location.  I would take NC over Ohio any day.  Tar heal born and tar heal bread and when I die I'll be tar heal dead.

Answer 2

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Answer 3

purchasing the 225k home is 75k in savings  Can pay 15 1/2 year of the 4800 taxes with that.   So it boils down to what area best meets your needs

Answer 4

It probably depends on your income... surely the two states have different income taxes.

Ohio:.....2.13% property tax......6.55% max income tax

NC:........0.83% property tax......7.75% income tax

If your income is high, maybe Ohio would be better, but if your income is low, NC may have the edge.

If the appreciation (long term) for both properties is going to be the same (no way of knowing for sure on this one), then the 300K house would be a better purchase than the 225K house - if all other things were equal... 5% appreciation on 300 is 15, compared to 11.25 on 225.... and then compounds.

Keep in mind that you don't want to be house poor... if you can't afford the 300k house, then 225 is the way to go.

Paying taxes is always a loss... paying a mortgage is a combination of loss and equity - for the same monthly PIT(I), always go with lower taxes verses lower principal and interest.

Answer 5

WHich is the best location?  

Location, location, location are the key words here.

Usually higher taxes mean better area.  However, this is not always the case.  

If all was equal, I would go with the lower taxes.