Is home buying a excellent investment?
You can make money on a home buy if you do it right. Even in this mortgage melt down market, it is possible. Their is probably not very many people talking about it. I reckon you still can get it done.
I am going to give an example of this. How much does it cost to buy a home? I mean out of pocket expense? I want to use 2009 as an example.
Since about 90% of all the loans right now are FHA loans. We will need to use FHA loans as the example because the will probably be the type of loan used.
We are going to talk about the down payment. Right now lenders are requiring a down payment of three percent. i am going to give a example of a one hundred thousand dollar house. So we are going to need a down payment of three thousand dollars.
You will probably need to bring some money for the closing cost. Lets say on average 2500 dollars to help with the closing cost on a $100,000 dollar house. So we have a total of about $5,500 dollars into the house.
But are we really down five thousand five hundred dollars. We need to take in account the eight thousand dollar government credit they will be given to the end of the year.
I believe we have a total of about three thousand dollars. We need to account for our home loan payment all so. This is going to be around eight hundred and fifty dollars. But if we are going to live in a house we are going to have a payment. This will either be rent
We all ways want to reckon of these home buy in the long term. we need to look at this for at least 10 years. So were are we going to be at with our $3000 in ten years?
Since we are looking at this house buy as long term We should expect the home property to be double the price we bought the home for. So we can add that to the $3000 we had all ready should be up.
Now we don’t know what the future will bring but we can use averages. So after the ten years we should be at about one hundred three thousand dollars in the ten years. That is a lot of money. How many investments can make a return like this? remember from day 1 we were up $3000.