How to do a financial comparison – Northville home buying tips

When buying a home it may take a comparision between the homes.  In this example I will use a piece of Northville real estate and aWest Bloomfield Township home.  When you start making your decision you of course write down what you like and what you don’t like in a home.  But you should also do a financial breakdown.  By doing a financial comparision you may find some surprising differences.

Where the comparisions may differ in prices are

  • association fees – different complexs and subdivisions have different homeowners association fees.  So be sure to include that in your comparision.
  • PMI – You may be choosing between two different price ranges.  On the higher priced house you may not have enough down payment to cover the 20% down.  You may be required to pay PMI because you don’t have the 20% down.  This can be costly, so be sure to include this.
  • homeowners insurance  – different cities have different insurance rates.  Call a local insurance agent to get a quote.  It may make you change your mind.  You may not have realized how bad the crime was.

Here is the info on Both houses.  I just estimated interest rates and the PMI.  The PMI may be higher.

Northville                                       West Bloomfield
purchase price                         224,000                                           300,000 deposit                                     40,000                                             40,000

Association fees                           2220

taxes                                          6008                                               6742

taxes broken down monthly            500                                                  561

loan amount with 60k down       179,200                                           260,000

payment at 5.5% 30 year              1017.48                                           1476.25

monthly taxes                               500                                                  561

homeowners insurance                     70                                                   70

association fee                                                                                    185 PMI                                                                                                   100                                            ______________

_______________                         ________________

Total                                         $1587.48                                  $2392.25

Sure you may love both homes but the financial considerations should over ride your loves.  Sure you love that $300,000 West Bloomfield home.  If you can’t afford the house payment THEN DON’T BUY THE HOUSE.

If it is a major stretch for your financials.  THEN DON’T BUY IT.  I want you to own the house five years from now.  I don’t want you to be house poor.  I want you to enjoy your house.  I hope this break down gives you an idea of how to put together your comparision.

Have a great day!

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