Is a 15-year Mortgage For Everyone?
|January 25, 2011||Posted by Roshawn Watson under Uncategorized|
- Principal, interest, taxes, homeowners associations dues, and insurance should not exceed more than 25% of your net (take-home) monthly income on a 15-year fixed mortgage
- The mortgage is no more than 3 times your annual household income (2 times if you are especially conservative).
- You are free of all consumer debt (including student loans, car note, credit cards)
Imagine what it feels like to be able to have the freedom to invest thousands on a monthly basis!
[Y]our portfolio would be worth $2 million in today’s dollars…almost twice what you would pocket with the “big house” strategy. With the “big house” strategy, not only would you face hefty mortgage payments, but…also…(higher) property taxes, maintenance costs, homeowner’s insurance and utility. However… you would live in a grander place but that just highlights what this is all about. Buying a bigger house isn’t an investment. Rather it is a lifestyle choice, and it comes with a brutally large price tag.
- they prioritize paying off debt
- they see the risk in viewing their mortgage as part of their investment portfolio (using the mortgage as leverage to invest)
- they are typically older and don’t have some of the same expenses as their younger counterparts
- they typically have a higher income and higher equity.
My Big, Fat Trashy Home: The Fall of the McMansion
Copyright 2012, Roshawn Watson, Pharm.D., Ph.D. All Rights Reserved.