COUNTING THE COST FOR EVERGREEN COLORADO REAL ESTATE
Before committing to a major purchase we all should sit down and count the cost. When buying a home most people will finance the purchase with a mortgage, so let’s examine the implications of a mortgage loan.
When you consider that the largest wealth producer of most couples in the U.S. their home, then the overall cost of the home should be well planned and well managed. The cost of a home will almost double when you add in the interest for a 30 year fixed loan rather than a 15 year loan. You might also consider that the interest alone on a 300k mortgage loan can amount to one third of all the spendable cash you will have in your entire working life.
If you earned $100,000 a year you will take home on average $45,000 after all taxes (income, payroll, sales, gas, energy, phone, real estate, state, import, export, restaurant and lodging etc.); then if it costs you $25k in hard living costs for food, car, housing, clothing, utilities etc. You will have about $20 thousand a year of discretionary spendable income. Now multiply the 20k by a 35 year working live and you have about $700,000 dollars of lifetime spending money-that’s the allowance the government gives you for your life.
If you took out a $300,000 dollar mortgage for 30 years you will pay $247,220 dollars in interest alone; but if you took out a 15 year mortgage your interest would only be $113,096 dollars; a savings of $134,124.00. That would be an additional lifetime spendable income of $134,124 dollars. However, your monthly payment will increase form $1520.00 a month to $2295.00 per month; or an increase of $775.00 but for only 15 years rather than 30 years. Rather than putting your money in a 401(k) which historically returns less than 2%, perhaps a wiser move would be to invest in your home and payoff your mortgage in 15 years rather than support Wall Street. The odds of you earning $134,124 in profits for a retirement account are slim to none at all-remember Wall Street just needed you to bail them out. And remember your 401(k) initial principal and profits are taxed at a standard rate while the profits from any sale of your home are tax free up to $600,000 dollars.
So consider well all your options before financing your new home.
If you are looking to profit from this challenging economic time give us a call. We are MARK ENGLISH REAL ESTATE and are Your one stop shop for all Your EVERGREEN COLORADO REAL ESTATE and CONIFER COLORADO REAL ESTATE. We are also an EVERGREEN COLORADO CUSTOM HOME BUILDER and are looking forward to serving You with all Your Real Estate needs. Please, give us a call at 303-674-0148, Email us at markenglishrealestate@msn.com or visit us on the web at www.evergreencoloradoliving.com. Don’t forget to register for Your FREE BUYER INCENTIVES.