An effective home price calculated with the TCHO metric can be used to compare Townhomes with HOA to Single Family homes with extra utility expenses, and to a Duplex with rental income. TCHO (True Cost of Home Ownership) is a holistic measure of home costs based on the market value of home and not on …
Comparing Home Buys Using the TCHO MetricTemplate Read More »
TCHO is a holistic measure of home costs based on the market value of home and not on the mortgage payment. It includes permanent costs (interest, property tax, HOA, etc.) and the opportunity cost of equity. When asked about the cost of owning a home, the first thing that comes to most people’s mind is …
True Cost of Home Ownership (TCHO), a New Metric Read More »
Using the criteria banks use to qualify for a mortgage, we show the income levels required to purchase a townhome, single family and duplex in high priced real estate markets. We will use the Mortgage Loan Qualification Calculator from FinCrafters to understand the criteria banks use to qualify borrowers for different types of home buys …
Mortgage Loan Qualification for Different Home Types Read More »
In today’s low-interest rate environment, with 20% down, you can qualify for a mortgage on a house that is 7-8x your net income (income minus two times all your existing monthly liabilities). Let us go through the steps banks take to qualify a mortgage loan. We first need to account for all the income and …
How Much of a Mortgage Loan Can You Qualify For? Read More »
A summary of tax implications from the sale of a primary residence or an investment property. The sale of a home can generate a Capital Gain if the sale price is higher than the adjusted cost basis. For a primary residence, the adjusted basis is the purchase price plus any home improvement costs and the …
TCJA law changes made property tax in states with high income tax rates more or less non-deductible. The maximum tax benefit of owning a home is ≈$1K per month from the mortgage interest deduction. TCJA law was enacted in 2017, but unless it is renewed, these changes will sunset by 2025. The TCJA impacted real …
In today’s low interest environment, it costs $5 a month for every $1000 of a 30-year mortgage at 4.5% fixed interest rate. At this rate, two-thirds of initial payments will be interest, and the rest will be principal. A mortgage payment includes two components: principal and interest. Though the monthly mortgage amount is always the …
Maintaining a $1M home with a $750K mortgage will need about $5K in monthly cash flow and would cost $75K in the buying and selling process. Here we will explain with examples the cost of buying, maintaining and selling a $1M home. Even though the closing costs and property tax figures are for the San …
