Re: Should I buy a house???
I've taken the numbers you've provided, and here is what I see.
A 30 year mortgage of $225,000 at 5.85% has monthly payments of $1327.00.
In the area that I live in, a good rule of thumb for taxes is 2% of home value
($225,000 * .02)/12 = $375/mo taxes.
Mortgage Insurance with no equity will surely cost between $80 - $100 a month.
$1327
$ 375
+$ 100
--------
$1802
So even if all things were equal, you would have less than $100 in savings a month.
Now, do you pay for your own heat in your apartment? If not, you need to figure that cost in as well. Same with water bill. How about repairs? If you are buying an older home, you need to have some funds saved up to make repairs regularly. I guarantee you this much, you can not trust a home inspector to find everything that is wrong with a house, this is especially true of older homes.
My general rule of thumb, is that you should have at least 5% down if you want to own a home. Owning a home is not a purchase, it is an investment. Just as I would not reccomend anyone to buy stocks on margin, I would not recommend the no down payment mortgage. Everybody who buys a home, needs to have a little equity in the house just in case the worst should happen, you can always sell without being upside down.
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