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Buying A Home - Real Estate Investing
Investing in real estate can be a lot of fun because the numbers you're dealing with are so much bigger. You only need a small down payment sometimes to buy a home for $200,000 or more. So the actual investment for you would be the cost of the home instead of the down payment you have.
In order to know how much you can afford you have to use a mortgage calculator to figure out your borrowing power. Then you can go to the bank and let them know how much of a down payment you have and what your credit score is to see if they will approve you for the loan.
You should call around to a few different banks and look on line to find the lowest interest rates available. Even saving 0.125% on you interest rate will save you over $7,500 on a $200,000 home.
The next thing you should think about is how long to amortize your mortgage. The standard options are 15 years, 20 years, and 30 years for any type of mortgage. If you opt for the 15 year mortgage you can get a lower interest rate on top of the amount of saving you will already have by getting the 15 year loan. Most interest calculators have an amortization schedule option so you can actually see the amount of savings.
Buying a home can be very exciting for you but you must be thinking financially until all the paper work is done. Even if you're only buying one home for the rest of your life it's still an investment compared to renting. So with an investment you should make sure you're actually saving money or the reason for doing it in the first place is pointless.
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