Home ownership is the
key to the financial future of most families. Homes have a history of paying
for themselves and providing family wealth and housing security.
Lenders have
traditionally used 28% of disposable income to determine the maximum they would
lend on a home mortgage. This requires that families make sure that their
spending is less than their income.
The best deal for a
“starter home” is a “fixer-upper” foreclosure loan assumption. The initial cost
is often just paying back taxes.
The best mortgage loan
is a 15 year loan. The monthly payment on a 15 year loan on a $150,000 house is
$1,360 per month with a $10,000 down payment and $3700 in closing cost. This
would require a net family income of $5,000 per month.
The next best mortgage
loan is a 30 year loan with the freedom to prepay premium. The monthly payment
on a 30 year loan on a $150,000 house is $997 per month with a $10,000 down
payment and closing cost. This would require a net family income of $3500 per
month
All 30 year mortgage
loans should be refinanced at 15 years as soon as financially possible.
The average single
family home price in the US is currently $287,600.
Norb Leahy, Dunwoody
GA Tea Party Leader
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