Rob Carrick says unless you have rich parents or a healthy six-figure income, the personal finances of home buying in many cities are messy
Considering that we’re living and working longer, it just makes sense for homebuyers to have the option of amortizing a mortgage over 30 years instead of the standard 25.
The benefit of a longer amortization is lower monthly payments, but there’s a significant cost in extra interest paid over the life of the mortgage. The real estate website Zoocasa has done a 25- versus 30-year amortizationfor cities across the country. Here’s how the numbers shake out for a house purchased at the national benchmark price of $729,700 in March.
What personal finance expert could possibly be OK with paying $122,051 more in interest to save $354 per month? Uh, I’m fine with it if someone is hell-bent on home ownership and that’s the only way they can afford it on a month-by-month basis. Unless you have rich parents or a healthy six-figure income, the personal finances of home buying in many cities are messy. You either opt out of home ownership, or you accept high prices and mortgage costs.
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