I'm tired of living in crappy apartments. I want to live in a nice house, away from close, noisy neighbors. [I live in Alabama]. A one-bedroom crappy apartment is around $500-600 a month. A "meh" one-br apartment is around $600-750", and a relatively new, one-br apartment could be anywhere from $800 to well over $1000 per month. I would like to live in a new apartment, but I have a hard time throwing $1000 away every month...
There are some brand new houses I'm interested in that run for $200,000. I read that you should not buy a house unless you know you'll live in it for at least 5 years, due to incurring thousands of dollars closing costs. . Maybe I'm being dense, but I don't understand that logic. I did a rough calculation of what my mortgage would be like if I bought one of those $200,000 houses and put a 20% ($40,000) down payment. With a 30 yr fixed loan I'd be paying $1053 per month (which I get back later, minus interest). I also looked up the average closing cost in Alabama based off of buying a $200,000 home, and that is $1842.
So, if I live in a new apartment for a year, I lose $12,000. If I live in a new home for a year, I lose $1842 (closing costs from buying) + mortgage interest (around 4.5%). And another $1842 when I sell the home. Lets say total is $5000. Why would I not buy and sell the home then? (Not factoring in non-financial criteria e.g. I can't sell the home as quickly as I'd like)
Edit: I did forget to factor in any penalties for breaking the mortgage contract early. I don't know much about that though, maybe someone could shine some light there.
Submitted April 05, 2018 at 02:04AM by TDN-ThickDickNick https://ift.tt/2GT3SjN
