The return on that investment comes in two forms. First, you live in the house and so it provides you with a real flow of valuable services. The second part of the yield on investment is the capital gain you receive if the home appreciates and you sell. Gains are excluded from taxation if the property is a primary residence and the gain is less than $250,000 for a single filer or $500,000 for a married couple filing jointly.
Do the math. Four years ago, the monthly payment on a $300,000 house with 20% down and a mortgage rate of about 6.6% was $1,533. Today that $300,000 house would sell for $213,000 and a 30-year fixed-rate mortgage with 20% down would carry a rate of about 4.2% and a monthly payment of $833. In addition, the down payment would be $42,600 instead of $60,000.
No comments:
Post a Comment