Real Estate - Interest charges??
As Im new to purchasing TRUE estate, it just very soon dawned on me that the interest one charged for homes is so high. I know that buying a home have become the new prosperity mechanism, but I never realize the cost. For instance, on a $400K home(30 years (a) 5.5% interest), the interest cost amounts to $417K. Thats more than the cost of the home. Can you imagine paying for anything else surrounded by life where on earth the interest paid is greater than the cost of the item? Does this give the impression of being unreasonable to anyone else?Answers: You are not paying on the home, but on the amount of cash you be given to buy the home.
If you do not want to pay interest discharge cash out of your pocket.
Car interest and credit card interest is much difficult then 5.5.
Also you earn more later that a year on the house, especially coupled with your due deductions.
Thats what make the world go round.
Just close to the shoes you ware, and paid $50.00 for. The personage that made it is making $2 or $3 a day. is that disinterested. If you don't have the change and want it its going to cost extra
If I want to live in a million dollar house, how much annual income should I be making?
Answers: Payment on one mil is around 10K a month. Taxes will be another 3k a month Utilities another 2k a month. income taxes on top of all this will be another 5-6k a month.. and you still have not paid for that MBW in your drive or the pool boy or maid.
Actually a million dollar house is not that big by California standards, but here my house is 6500sq ft, and only value at 450k . But taxes are outrageous and getting worse yearly. What you need to quit the party and bar scene Quit eating out, Enjoy watching TV, Stop acting the big shot, and make the most of what you have. Shop on sale items only. ( I have 400 shirts in my closet and every on bought on sale at at least 60%+ off Tommy ralf Raintree ellis. polo Jack n...)
Don't bite off more than you can safely handle, be patient, work for it, and some day it will happen.
Be careful and honest, after all if your home is a Jail. most of them cost over one mil. LOL
i would say $750,000 to $800,000
bcuz ur gonna have expenses nd ur gonna want 2 pay ur mortgage
I went to a mortgage calculator and figured that you could get a million dollar house for about $6653 a month. That is 0 down (yeah good luck with that), 30 year fixed rate of 7%. That is not including a lot of expenses.
That would come to $79,836 a year. You should never pay more than 30% of your gross salary for a house. So you would need a gross salary of $266,120 a year to afford the place. The above answers were almost exactly on mark.
I forgot all about taxes and insurance. Those will drive up your cost quite a bit. I wonder what the PMI would be on a million dollar mortgage?
The old rule was that you bought a house equal to 3 times your annual income. Rent or mortgage was supposed to be 1/4 to 1/3 of your income.
I don't think those rules are still in effect because houses cost so much today, and wages haven't kept up. Over the last few years I know a few people who have gotten houses they really couldn't afford, on interest-only loans or partially-amortized loans, or adjustable loans. The idea was that if they stayed in the house a few years they'd make money on appreciation, then they could sell the house and use what they'd earned to buy a house they could better afford. But this idea only worked as long as the housing market was continually rising and expanding. A lot of these people are in trouble today!
Whats the general percentage for a decent home offer? 85% of the asking price?
Answers: Having had investment properties for the last 20 years I agree with David,
The way to help in figuring the price is to go to the county recorders office and see what the house sold for last time it was on the market, or the neighbors house that may be similar. In investment and residential properties, I have found that time on market has a lot to do with final price. If it has been lowered once or twice, or say almost 6 months on market, the Listing contract may be about to run out and the Realtor will push for them to accept a lower offer for fear of loosing the listings.
If investment property, Check with local lenders and see what their guidlines are for rent to price ratio. Mine here is roughly 2% But we are pretty aggressive on rents to value.
You are not trying to make a friend, You are trying to make the best deal possible, and not have to pay for the next 15 years to be a nice guy. I have saved $50k on deals because I had the guts to actually offer what I thought the unit was worth.
It depends on the market, but my general rule is that the house is worth whatever anyone is willing to pay for it. If it is a house that's been on the market for over 6 months, I would come in low with an 80% offer. They can always counter and you can always put an offer on a different house.
If I was looking at it as an investment property then I would offer no more than 70%.
In some areas, asking OVER the asking price is the norm.