If you are a home “owner” I’m sure you know what I’m talkin’ about, but I’ve said it before, and I’ll say it again – if you’re looking to own a home one day be absolutely certain you’re ready to pay for the associated costs.
There are a ton of benefits that go along with this “American Dream,” (tax write-offs, stability, equity, etc) but you’ve got to be aware of the financial drains as well. And as most of you know, had I been more aware 2 1/2 years ago I would have done things a lot differently — Like either bought a smaller place or continued renting for a couple more years.
But it is what it is, and today I thought it would be interesting to see the breakdown of how our living situation has changed financially since renting. The numbers may be off a bit as I can’t recall exactly what we paid while renting (I didn’t start tracking this stuff until after we bought – when I realized I need to pay more attention!) but it’s pretty close:
As you can see, we pay about $1,200 MORE a month right now . That’s pretty substantial, even with the tax write-offs (we may see about $600 of it back if I had to guess). But even crazier here, 100% of all that interest & taxes are NOT going towards the principal loans we took out on the house! Meaning we still would have owed the original $360k had we not been chipping away at it by our own accord (we have 100% financing, which surprisingly we actually like!)
So if you do own, or you’re thinking about owning, take all these things into consideration :) Just applying $100 or $200 extra a month towards your mortgages will drastically cut the amount of interest you’ll eventually pay in the end & won’t drive you *as* crazy. But I must warn you, it’s not that easy. I’ve been praising it for over a year now and I still struggle every time I sit down to do it! Haha…next time we’ll be buying a place closer to the lower end of our budget, not our highest.
How much did you all end up dishing out in interest & taxes last year?
Jay loves talking about money, collecting coins, blasting hip-hop, and hanging out with his three beautiful boys. You can check out all of his online projects at jmoney.biz. Thanks for reading the blog!