Consumption and Real Estate
If I get a cheap condo and have it paid off in 5 years, then what do I do?
Question : If I get a cheap condo and have it paid off in 5 years, then what do I do?
I’m 24 & have been saving a lot of $ . I currently make $ 30k/yr, and I would like to buy a condo that costs $ 60-70K My goal is to have it paid off within 60 months.
I should be able to put down 20-25 %, so I won’t have to pay mortgage insurance. Also, I live rather cheaply, always looking for good deals, and paying for all purchases (vehicles, etc) in cash.
2 questions:
1) How practical is it for me to have it paid within 60 months?
2) If I don’t have a mortgage payment once I am 30, what do I end up doing with all the money I’m not putting towards a mortgage/interest? (it almost seems too good to be true?!?!?!)
Thanks for your insight!!!
cheap condo insurance
Best answer:
Answer by Oldmansea
Don’t forget the condo fees….you always have to pay them. and TAXES TOO> you own it you pay.
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#2 written by codysdoor 1 year ago
You’ll always have to pay:
1) Property tax
2) Condo fees
3) Home owners insurance (if not covered in above fees)
4) Utilities.The only difference is you’ll have one less payment (mortgage).
However, what I’d suggest doing with all that extra money is saving it so you can get out of whatever city you live in that has a 60k condo and a 30k/yr job.
Try out a real city. You might like the change…
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#4 written by Zeltar 1 year ago
I was you a couple of decades ago. Thought just like you too. It’s a lofty goal. You’re going to quickly discover home ownership comes with a host of other costs which will utilize your disposable income. Here are some examples:
– Interest (instead of making interest on your savings, you’re now paying a bank interest charges for lending you the money).
– Property Taxes
– HOA fees (you did say Condo)
– Utilities (except for trash collection which your Condo HOA fees will cover).If you still think you have enough extra money to pay down Principal over 60 months… then you haven’t a woman in your life. And, trust me on this, when you own your own place a woman will find a way to your heart… and then take over your dwelling. And, when this happens, you won’t have ANY money left over to pay more than the regularly scheduled mortgage payments (i.e. over 30 years).
Edit: Did some calculations for you….
For a 70K place with 20% down, you have a 56K loan. You can get a 5% 30 year fixed rate in todays market. To pay that loan off in 5 years (60 months), you’ll need to pay $ 1056.79 per month in P&I. This is 42% of your gross income. You’ll need $ 700 a year in property taxes (i.e. $ 58.33 / month) and the HOA fees. - Comment Feed for this Post
Zeltar really has nailed a lot of issues you haven’t even been able to see. Paying off a home at 24 yrs old doesn’t make a lot of sense. Being house poor at your age makes no sense as this won’t be the last home in your life. At your age, many things could change in a heartbeat and you could be moving at any time given changes in your marital status and the possibility of a family. Your condo wouldn’t support a family trust me. Put the condo on a longer mortgage, take advantage of equity as needed and be able to re-sell at a great price when needed. A much more adult approach to home buying.