Two Costs to Consider when Buying a House

The price of the house and the price of the money - the two cost you MUST consider when you buy a home.

Think about it. You want the best price, or a deal, on the house. Right? You negotiate down to the final $100. Of course the price of the house is important!

Now it's time to finance the great priced home you just agreed to purchase. Do you consider the cost of the loan? Or is it a cost you assume you can't control?

Consider this:

$150,000 loan for 30 years - 5% interest rate .  Monthly Principle and Interest Payment = $805
    Two years worth of interest = $15,392


Now take the same loan at 5.25% interest.  Monthly payment = $828
    Two years worth of interest = $16,173

Hmmm...that's nearly $800 more interest in just two years!  Plus $23 a month more for the payment (or $552 over two years).  And the equity in the home increased by $200.  That means a .25% increase in rates just cost $1500 in two years.  And that number grows over the life of the loan.  Makes that last $100 you negotiated on the price seem almost irrelevant, doesn't it?

Consider a home worth more than $150,000?  Higher priced home = greater difference. 

Don't be short sited when you buy a house.  Just because you got a great house at a great price, doesn't mean you got the best deal.  Make sure you consider the cost of the money.  Interest rates are still extremely low!  Take advantage or pay more.  It's that simple.

How late payments, short sales and foreclosures impact your credit score

I thought this article had a lot of good information regarding the impact a mortgage late payment can have on your credit score. It also explains the implications on your credit score of a short sale and a foreclosure.

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  How Foreclosure Affects Your Credit Score

  Foreclosures—and how you handle them—may have long-term credit score implications. Read

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