How much you actually spend on house - my calculation

[Telugodura456]

Data assumptions :

30 year loan at 2.6%, 15 year loan at 1.8%

House price 780k

Down payment 78k

Closing costs 30K

Taxes : 11k

HOA + insurance: 450 pm

Results:

Monthly Payment : 4600 (including PMI)

Scenario 5 year ownership (assuming house price does not decrease):

Total spent (assuming no repair costs) : 4600*60 = 276,000

Equity part = 80,000

Actual expense = 196,000

Opportunity cost of 110k (78k down plus 30k closing costs) total down (assuming 8 percent return in stock market) = 80k

So total expense = 196,000 + 80,000 = 276,000

Total expense  per month= 276,000 /60 = 4600

So cost of enjoyment of house = 4600.

Conclusion

So if you can rent a house for less than $4600 then you are better off than buying a house

[Telugodura456]

Anything wrong with my caluclation ?

[Spartan]

u cannot put price tag for Children's experience growing up in own house 

[Telugodura456]

Just now, Spartan said:

u cannot put price tag for Children's experience growing up in own house 

"own" house ki rental house ki theda ? does child feel a special connection with the soil? children grow up in a neighborhood not a house. 

[Spartan]

Just now, Telugodura456 said:

"own" house ki rental house ki theda ? does child feel a special connection with the soil? children grow up in a neighborhood not a house. 

when u rent in apartment compared to condo/single family home. which is the case in west coast.

there is lot of difference

[Telugodura456]

1 minute ago, Spartan said:

when u rent in apartment compared to condo/single family home. which is the case in west coast.

there is lot of difference

you can rent single family houses. You get pretty largish houses for 4k.

[Spartan]

3 minutes ago, Telugodura456 said:

you can rent single family houses. You get pretty largish houses for 4k.

monthly 4K rent katte satta unte..ille konkuntam. kada...

 

[snoww]

3 minutes ago, Telugodura456 said:

you can rent single family houses. You get pretty largish houses for 4k.

Hard to expect any owners will let us stay for rent for 10-20 years. 

you can try keep shifting homes, but that will be a big headache to manage. 

[Telugodura456]

Just now, Spartan said:

monthly 4K rent katte satta unte..ille konkuntam. kada...

 

Adhe i made the calculation and shows (ofcourse with my assumptions) its more economical to rent at 4k ani.

Ofcourse with rent there are some other variables like owner wants it back. But owning also you can get repairs etc.

Let me know if you think i missed any significant assumptions.

[Telugodura456]

Just now, snoww said:

Hard to expect any owners will let us stay for rent for 10-20 years. 

you can try keep shifting homes, but that will be a big headache to manage. 

Actually the house owning becomes cheaper if you live for 15 years because as you keep paying the equity grows more rapidly and interest burden comes down. I took 5 year assuming you got bored of living there and want to move out. I have seen a lot of people moving out after 5 -7 years.

[Spartan]

2 minutes ago, Telugodura456 said:

Adhe i made the calculation and shows (ofcourse with my assumptions) its more economical to rent at 4k ani.

Ofcourse with rent there are some other variables like owner wants it back. But owning also you can get repairs etc.

Let me know if you think i missed any significant assumptions.

4k monthly which u pay...u r not getting it back ..its just drain...

ade nuvvu intiki 4K EMi kadite...after 30yrs..u or ur kids will have an asset.....

leda 15yrs ye unta anukunna...u can still sell home at profile for 100K-200K..which is still profit..rather than flushing out 4K everymonth and not getting back anything.

[snoww]

Just now, Telugodura456 said:

Adhe i made the calculation and shows (ofcourse with my assumptions) its more economical to rent at 4k ani.

Ofcourse with rent there are some other variables like owner wants it back. But owning also you can get repairs etc.

Let me know if you think i missed any significant assumptions.

Tax savings and Probable house value appreciation over decades. 

[Spartan]

Just now, Telugodura456 said:

Actually the house owning becomes cheaper if you live for 15 years because as you keep paying the equity grows more rapidly and interest burden comes down. I took 5 year assuming you got bored of living there and want to move out. I have seen a lot of people moving out after 5 -7 years.

5-7 is short time to buy house..

anduke u need to buy home which can be rented out in worst case scenarios....

[Telugodura456]

Just now, Spartan said:

4k monthly which u pay...u r not getting it back ..its just drain...

ade nuvvu intiki 4K EMi kadite...after 30yrs..u or ur kids will have an asset.....

ypu have made a total down payment of 110k for the house. If you rent you can keep the down payment and invest in to stocks. At 8% growth you can make 70k extra in 5 years. Also lets say you can rent a same house (usually rents cheaper) at 3,600 then there is another 1000 savings which is another 60k extra in 5 years.

So total wealth is in 5 years in renting is 130k. In house is only 80k(the equity part of the monthly payment).

[Spartan]

2 minutes ago, Telugodura456 said:

ypu have made a total down payment of 110k for the house. If you rent you can keep the down payment and invest in to stocks. At 8% growth you can make 70k extra in 5 years. Also lets say you can rent a same house (usually rents cheaper) at 3,600 then there is another 1000 savings which is another 60k extra in 5 years.

So total wealth is in 5 years in renting is 130k. In house is only 80k(the equity part of the monthly payment).

probability of making money on stocks is less compared to house.

also after 30 yrs...with low risk..atleast kids wont end up homeless

there are many pros in owning home than cons for majority of people