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New Home Purchase
As a general rule, homes appreciate about four or five
percent a year. Some years will be more, some less. The figure will vary
from neighborhood to neighborhood, and region to region. Five percent
may not seem like that much at first. Stocks (at times) appreciate much
more, and you could easily earn over the same return with a very safe
investment in treasury bills or bonds.
So if you bought a $100,000 house and
you could not pay cash for the home. You got a mortgage.
Assume you put as much as twenty percent down – that would
be an investment of $20,000. At an appreciation rate of 5%
annually, a $100,000 home would increase in value $5,000
during the first year. That means you earned $5,000 with an
investment of $20,000. Your annual "return on investment"
would be a huge twenty-five percent. Of course, you are
making mortgage payments and paying property taxes, along
with a couple of other costs. However, since the interest on
your mortgage and your property taxes are both tax
deductible, the government is essentially subsidizing your
home purchase.
Your rate of return when buying a home is higher than most any other investment you could ever make. So apply for your next new home loan and start building the equity in your home today.
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New Home Loans >> New Home Purchase