First Time Buyers Beware! You might accidentally set yourself up for long term financial success!?!

Frank is renting a townhome in Avalon Woods, and is paying $875 per month for the privilege to do so.  He has thought about buying a home, but assumes he'd have to pay quite a bit more per month.

Well, maybe not!  If Frank were to buy a townhome in Avalon Woods (or Liberty Square, Beacon Hill, Harmony Heights, etc) he might pay around $140,000 for the townhouse --- or even less!

Assuming $140,000, here is an illustration of what Frank's mortgage payment might look like, with a ridiculously low rate of 3.875% (which one of my clients was quoted yesterday)....



Frank will still have to pay $40/month for the Property Owners Association on top of this mortgage payment, but his monthly housing cost is now going to be $775.

Wait a minute.......Frank is going to move from paying $875 in rent to paying $775 for a mortgage payment?  How could this be?

• extraordinarily low interest rates
• more townhouse sellers than buyers, driving prices down

The great news here is that if Frank decides he wants to move on after five years, he would have a fantastic opportunity to keep the townhouse and rent it.  After all, his monthly payment will still be right around $775, and his rental income will probably have increased to $900 or $925.

What are you waiting for?  If you're a potential first time buyer, let's talk through your situation to see if a home purchase might fit into your short term (housing) and long term (investment) plans.