I hear a lot of folks chant, wait for the price of RE to drop further. If your buying to stay for 15 - whenever years, I say it?s time to buy now.
When I bought my property in the early 80's, the interest rate was ~19%. Started with an adjustable then Bite the bullet after a refinance and went with a 15 year fixed @ 12%. Refused to refinance after that so my property tax would not increase any further. Now my rent is the low property taxes.
Here?s a run with progressing rate hikes up to 15% (looks like it?s heading that way), 15 vs. 30 year loans, price drop from $600,000 to $300,000 (assuming the county assessor drops the accessed value to the price drop). Sometimes, you have to bite the bullet on monthly costs to get ahead in the future.
However, you can take a chance, wait for the price drop, pay the higher fixed rate, and then refinance later at a lower fixed rate, but higher property taxes.
$600,000.00 --- Property cost
20% --- Down payment %
$480,000.00 --- Principal
6.00% --- Interest
15 --- Year loan
$4,050.51 --- monthly payment
$400.00 --- Property Tax 0.083% (month)
$4,450.51 --- Total monthly payment
$801,092.30 --- Cost at Payoff
33.52% --- % over property cost @payoff
---
$600,000.00 --- Property cost
20% --- Down payment %
$480,000.00 --- Principal
6.00% --- Interest
30 --- Year loan
$2,877.84 --- monthly payment
$400.00 --- Property Tax 0.083% (month)
$3,277.84 --- Total monthly payment
$1,180,023.31 --- Cost at Payoff
96.67% --- % over property cost @payoff
---
$500,000.00 --- Property cost
20% --- Down payment %
$400,000.00 --- Principal
9.00% --- Interest
15 --- Years loan
$4,057.07 --- monthly payment
$333.33 --- Property Tax 0.083% (month)
$4,390.40 --- Total monthly payment
$790,271.94 --- Cost at Payoff
58.05% --- % over property cost @payoff
---
$500,000.00 --- Property cost
20% --- Down payment %
$400,000.00 --- Principal
9.00% --- Interest
30 --- Years loan
$3,218.49 --- monthly payment
$333.33 --- Property Tax 0.083% (month)
$3,551.82 --- Total monthly payment
$1,278,656.57 --- Cost at Payoff
155.73% --- % over property cost @payoff
---
$400,000.00 --- Property cost
20% --- Down payment %
$320,000.00 --- Principal
12.00% --- Interest
15 --- Years loan
$3,840.54 --- monthly payment
$266.67 --- Property Tax 0.083% (month)
$4,107.20 --- Total monthly payment
$739,296.80 --- Cost at Payoff
84.82% --- % over property cost @payoff
---
$400,000.00 --- Property cost
20% --- Down payment %
$320,000.00 --- Principal
12.00% --- Interest
30 --- Years loan
$3,291.56 --- monthly payment
$266.67 --- Property Tax 0.083% (month)
$3,558.23 --- Total monthly payment
$1,280,961.71 --- Cost at Payoff
220.24% --- % over property cost @payoff
---
$300,000.00 --- Property cost
20% --- Down payment %
$240,000.00 --- Principal
15.00% --- Interest
15 --- Years loan
$3,359.01 --- monthly payment
$200.00 --- Property Tax 0.083% (month)
$3,559.01 --- Total monthly payment
$640,621.64 --- Cost at Payoff
113.54% --- % over property cost @payoff
---
$300,000.00 --- Property cost
20% --- Down payment %
$240,000.00 --- Principal
15.00% --- Interest
30 --- Years loan
$3,034.67 --- monthly payment
$200.00 --- Property Tax 0.083% (month)
$3,234.67 --- Total monthly payment
$1,164,479.63 --- Cost at Payoff
288.16% --- % over property cost @payoff
When I bought my property in the early 80's, the interest rate was ~19%. Started with an adjustable then Bite the bullet after a refinance and went with a 15 year fixed @ 12%. Refused to refinance after that so my property tax would not increase any further. Now my rent is the low property taxes.
Here?s a run with progressing rate hikes up to 15% (looks like it?s heading that way), 15 vs. 30 year loans, price drop from $600,000 to $300,000 (assuming the county assessor drops the accessed value to the price drop). Sometimes, you have to bite the bullet on monthly costs to get ahead in the future.
However, you can take a chance, wait for the price drop, pay the higher fixed rate, and then refinance later at a lower fixed rate, but higher property taxes.
$600,000.00 --- Property cost
20% --- Down payment %
$480,000.00 --- Principal
6.00% --- Interest
15 --- Year loan
$4,050.51 --- monthly payment
$400.00 --- Property Tax 0.083% (month)
$4,450.51 --- Total monthly payment
$801,092.30 --- Cost at Payoff
33.52% --- % over property cost @payoff
---
$600,000.00 --- Property cost
20% --- Down payment %
$480,000.00 --- Principal
6.00% --- Interest
30 --- Year loan
$2,877.84 --- monthly payment
$400.00 --- Property Tax 0.083% (month)
$3,277.84 --- Total monthly payment
$1,180,023.31 --- Cost at Payoff
96.67% --- % over property cost @payoff
---
$500,000.00 --- Property cost
20% --- Down payment %
$400,000.00 --- Principal
9.00% --- Interest
15 --- Years loan
$4,057.07 --- monthly payment
$333.33 --- Property Tax 0.083% (month)
$4,390.40 --- Total monthly payment
$790,271.94 --- Cost at Payoff
58.05% --- % over property cost @payoff
---
$500,000.00 --- Property cost
20% --- Down payment %
$400,000.00 --- Principal
9.00% --- Interest
30 --- Years loan
$3,218.49 --- monthly payment
$333.33 --- Property Tax 0.083% (month)
$3,551.82 --- Total monthly payment
$1,278,656.57 --- Cost at Payoff
155.73% --- % over property cost @payoff
---
$400,000.00 --- Property cost
20% --- Down payment %
$320,000.00 --- Principal
12.00% --- Interest
15 --- Years loan
$3,840.54 --- monthly payment
$266.67 --- Property Tax 0.083% (month)
$4,107.20 --- Total monthly payment
$739,296.80 --- Cost at Payoff
84.82% --- % over property cost @payoff
---
$400,000.00 --- Property cost
20% --- Down payment %
$320,000.00 --- Principal
12.00% --- Interest
30 --- Years loan
$3,291.56 --- monthly payment
$266.67 --- Property Tax 0.083% (month)
$3,558.23 --- Total monthly payment
$1,280,961.71 --- Cost at Payoff
220.24% --- % over property cost @payoff
---
$300,000.00 --- Property cost
20% --- Down payment %
$240,000.00 --- Principal
15.00% --- Interest
15 --- Years loan
$3,359.01 --- monthly payment
$200.00 --- Property Tax 0.083% (month)
$3,559.01 --- Total monthly payment
$640,621.64 --- Cost at Payoff
113.54% --- % over property cost @payoff
---
$300,000.00 --- Property cost
20% --- Down payment %
$240,000.00 --- Principal
15.00% --- Interest
30 --- Years loan
$3,034.67 --- monthly payment
$200.00 --- Property Tax 0.083% (month)
$3,234.67 --- Total monthly payment
$1,164,479.63 --- Cost at Payoff
288.16% --- % over property cost @payoff