Can you make any money on your home?
You can make money on a home purchase 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 think you still can get it done.
I am going to give a example of this. I am going to use the current market as an example of this. First we need to get all the information as far as the cost of purchasing a home. We want to get all the information for this.
Now most loans are FHA loans or federal housing association type loans. So I am going to use this as an example. I am all so going to use nice round numbers.
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.
Most people would say that we are down $5,500 dollars but this would not be actually correct. The Us government is giving a $8000 dollar credit to buy a house this year.
So our total now is going to be $3000. What about the property payment? we are still going to have a mortgage payment of eight hundred fifty dollars. but you have a rent payment to. So no matter what we are going to have a payment.
We all ways want to think of these home purchase 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 purchase 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.
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