Yes, if you pay interest over 30 yrs you end up paying about double the original price of the house. Snave up above explains it nicely; If you get a $200,000 loan at 6% on a $250,000 house, then you will pay $431,000 total or (231,000 in interest) At the end of the 30 years. On top of that, you will be paying taxes, insurance and maintance.
Now to add to that example, lets say over the 30yrs you spend $5,000a yr in insurance, taxes, maintance. Thats an additional $150,000? (am I calculating that right? holy cow!) that has been paid over the 30 yrs and also needs to be recouped when selling the house. Your $200,000 house needs to sell for $581,000 to break even. (is that calculated correctly? I'm still very new to this business) But regardless- its these numbers that scare me. Do I have almost $600,000 to spend on a house over the course of my lifetime? maybe. Have I found a single listing yet that costs $200k but looks worth over half a million? not yet.
Disclaimer- before people jump down my back on how I am still going to be spending a large amount in rent over those 30yrs if I choose not to buy- I know that. Thats why I'm still considering buying.
Last edited by gamecock43 : 05-29-2008 at 08:39 PM.
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