# About 12 Years Ago You Bought A House For \$300 000 And Took Out A 30-year Mortgage With An Annual

About 12 years ago you bought a house for \$300,000 and took out a 30-year mortgage with an annual interest rate of 9.5 percent to finance 95?

I have tried solving in every possible way, except the right way. Please help how do you get 147?
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Finance Help - PV, mortgage, annuity, loan?

You'll probably have better luck posting these one at a time...

1) Mortgage pmt:
Use Present Value ordindary annuity and solve for payment PMT.
PVoa = PMT [(1 - (1 / (1 + i)^n)) / i]
where n = 30yrs*12months per year = 360, and i = rate/12 = 0.07 / 12 = 0.00583
sub in your values and solve for PMT
300,000 = PMT [(1 - (1 / 1.00583^360)) / 0.00583]
PMT = 1,995.90 (note: answer varies slightly depending on how many decimal places you carry for the 0.00583 rate)

Amount they can pay: 23,450 / 12 = 1954.17
Unpaid difference: 1995.90 - 1954.17 = 41.73
future value of the unpaid difference, use FVad, where all i = the monthly i, and pmt = 41.73
FVad = (1+periodic i){(PMT [((1 + i)^n - 1) / i]}
FVad = (1.00583){41.73[((1.00583^360) - 1) / 0.00583}
I'll let you do the math on this one

How much should my house cost if i make \$100,000 a year?

The best way to answer that is to work backwards from your monthly income. Most banks have caps on the percentage of debt your household should have relative to your income and you should have your own cap on what is sensible for your family in terms of cash going out. On \$100K per year, your monthly income is about \$8300 before tax. Mortgage rates are about 5.25%, that's a safe estimate for now). A \$600,000 home will cost you about \$2100 per month (assuming an interest only loan, 20% down). Each \$100,000 in home price will cost you \$438/ month again assuming an interest only loan.

If you don't have the down payment, you could use FHA financing, where you can put as little as 3.5% down. But then the monthly cash out lay is on that same \$600K home, \$2533 AND you'll have to pay private mortgage insurance which adds something like \$400 (double check me on this).

Your best approach is to calculate your monthly expenses, and get a sense of what you could devote to a house payment. Multiply that by 12, divide it by current mortgage rates and you'll get a sense of the final home price you can afford. Remember that you will also need to spend money on insurance and property taxes. So, if you can afford to spend \$2000 on your mortgage, multiplying by 12 gives you \$24000 per year. Divide that by 5.25% (.0525) and you get \$457,142. That's approximately what you can afford to buy.

What is the least you should make to afford a house worth 2 million?

A good general rule of thumb is to spend no more than 3X your gross income on a house. Therefore, if you want to buy a \$2 million house and have a \$400,000 downpayment and a \$100,000 cash buffer in case you lose your job, then you should make around \$667,000 a year.When you own a \$2 million house, EVERYTHING costs more. We’re talking \$24,000+ a year in property taxes, higher heating bills, higher home insurance, higher maintenance costs, higher cleaning costs, higher landscaping costs, higher mortgage, and so on.I should know, because I bought a house in San Francisco for \$1,525,000 back in 2005 and sold it for \$2,740,000 in 2017. The house was too big and costly for just my wife and I at the time. It felt like a waste to have several unused bedrooms and bathrooms. Further, there was no way we’d be willing to pay \$8,800 a month to rent the house, so we rented it out for three years.We now live in a a smaller house that’s 40% cheaper and we love it. It feels awesome to fully utilize the house, especially since we are stay at home parents to a baby boy.Below is a sample budget for a family of three living in an expensive city earning \$300,000 a year. Their mortgage is only \$900,000 versus a \$1,600,000 mortgage for a \$2,000,000 house after putting 20% down. I would call this a pretty middle class lifestyle, despite the six figure income. In other words, \$300,000 is NOT enough to comfortably afford a \$2,000,000 house.I highly recommend you DO NOT overextend yourself in this real estate market. House prices in many cities have far surpassed their previous peaks with valuations in coastal cities trading at egregious levels. I sold my SF rental house for 30X annual gross rent, for example. I’d much rather “rent luxury and buy utility” for higher cash flow generation.The house I sold for \$2,740,000 was only generating \$60,000 after all costs. Meanwhile, my \$500,000 investment in the heartland through real estate crowdfunding has the potential to generate the same amount of income but with \$2,240,000 less exposure!Non-coastal city real estate is trading at much cheaper valuations with net rental yields that are 4–5X higher. In the past, we couldn’t access these types of opportunities easily. Thanks to technology, now we can.There are no investment guarantees of course, but at some point, valuations do matter. Pay attention because rents are down from their all-time highs in many cities, but prices are still elevated.Best of luck!Sam, Financial Samurai

How much money do you need to buy a \$350,000 house?

The absolute minimum you can put down is 3%(10K). This just covers closing costs and leaves you with a full balance. I would suggest putting 10% (35K) down because you can get a much better loan, and it will save you thousands in the long run.

After taxes and insurance are added to your payment, you will be paying \$800-\$850 per hundred thousand that you owe. If you put nothing down, count on \$850. Owing 350,000
your monthly payment would be just under \$3000 per month.

You should never go more than five times your annual salary for a mortgage, and I reccommend only four times unless you will be making more money in the near future.In this case you need to be 70K per year to get a mortgage this large. You will also need to have only a little in monthly debt payments.

I am 27 years old. I have \$300,000 in the bank with no debt. What should I be doing to ensure I can retire by 50?

I "retired" at 40 with less than that, and went sailboat cruising.  Now after 15 years, I have somewhat more than that. Well, we stopped to teach school a couple of times because the boat was more expensive that we expected. But mainly, we did two things: 1) saved regularly and invested in stock and bond mutual funds, and managed those funds ourselves - no loads or commissions to eat away the returns, and 2) cut our costs-of-living to the bone. We get along very comfortably on about \$800 per month. Some day, we'll get Social Security maybe - then we'll REALLY be rolling in the dough! But for now, we just live on the savings - and been doing that a long time. With the market returns of the past decade, we have averaged a little over 8% with a blend of 70% S&P 500 index fund, and 20% Long-term Treasury Bond index fund. The rest is in bank accounts for immediate living costs. We don't like to follow the market so we don't - twice a year, we rebalance the funds: if stocks are up, we sell high to get it back to 70%. If stocks are down, we sell some bonds and buy stock (since the are on sale!).Cutting costs is hard for most people. If you watch TV, you come to believe you cannot live without it. If you eat at restaurants much, you forget how to cook or maybe never learn. If you have a demanding career, it is easy to get wrapped up in that and forget that you are doing it all for some anonymous stockholders or senior partners. Socrates said 'the uninspected life is not worth living'. You have to decide what you want your life to be like, and if you do a thorough job with that inspection, you will not be very likely to come up with a life involving working until you are 67. Just my opinion.