Sunday, December 06, 2009

How to cut your monthly nut by at least one third

Okay, owning a home isn't for everybody. And I know I'll take flak for this. But.

The house in the picture is 9953 Aldea. It just closed. I'd been working with the buyers for quite awhile, and they went through the same thing that all buyers are going through now -- short inventory, rising prices, multiple offers. They finally decided to buy the house that they have been renting and living in for the past three years.

With me so far? Okay, their monthly rent was $3000/mo. Typical for a mid-Valley, 2500+ square foot pool home in good shape. Their mortgage now is $1568/month. Yes, property taxes will add an extra $500+ a month. They paid $565,000 and yes, their down payment was large. But still, thanks to today's low interest rates, they cut their monthly housing expense by about one-third. And that's not even taking into consideration the mortgage tax deduction.

Not bad, if you ask me. Just sayin'.


  1. It sounds like they put about $250,000 down using a 5% 30yr fixed.

    But, I'll go you one better, based on that guesstimate: your clients could have bought a condo in Valencia for the price of their down payment alone and reduced their rent 100%.

    Just sayin'

  2. Anonymous6:16 PM

    You are not factoring in the opportunity cost of the money wrapped up in the down payment. The house is not appreciating, the money was.