Buy or Rent a House
From Lazer
Below are some interesting information about the current housing market and reason why not to purchase a house. I believe that these site are bis on the side of not purchasing, but their is some good information to read.
- Housing Crash
- Buy or rent calculator
- Buy or rent calculator
- CA properties Tax
- Roller Coster
- Buy or rent calculator with Bubble
This calculator calculates the total cost of the mortgage, property tax, insurance, and the amount one gets back on taxes.
On a house that cost $700,000 with a $80,000 down payment with 6.0 % 30 year mortgage the monthly payments would be after taxes would be $4,209.67.
The break down is:
| Mortgage Rate | 6.0 % |
| Mortgage Type | 30 year fixed |
| Initial Cost | $700,000.00 |
| Closing Cost | $13,000.00 |
| Mortgage Amount | $633,000.00 |
| Monthly mortgage payment | $3,795.15 |
| Monthly Property taxes 1.1% | $641.67 |
| Monthly Insurance 0.036 % | $252 |
| Monthly Maintenance 1 % | $583 |
| Pre-tax Monthly cost of home-ownership | $5,271.67 |
| Tax saving per month | $1,062 |
| After-tax Monthly cost of home-ownership | $4,209.67 |
If the money was invested instead of purchasing the house. It would cost $3,000 a month to rent an equivalent house.
| APR | 5.0% |
| APR after 25% taxes | 3.75% |
| Initial Balance | $80,000 |
| Monthly Rent with insurance | $3,000 |
| Monthly Contribution | $1,209.67 |
| Balance after 30 years After taxes | $1,049,136.05 |
The cost of selling a home is around 10% of the selling price. So, after 30 years of having the home it would have to be worth $1,154,049.66. Therefore the house would have to have an yearly appreciation of 1.68 % to equal the amount made from not purchasing the house.
Compound Interest formula 
$1,154,049.66 = $700,000(1 + Rate)30
Solving for the Rate gives:
Rate = 
= 0.0168 = 1.68 %
