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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