Wednesday, September 14, 2011

Mortgage Update + Condo Costs (September '11)

I got paid on Friday so we sent our mortgage payment in.

Principle paid down: $155.21
Interest: $495.43

New Balance: $113,085.19

The pay off date is still January 2039... 8 months ahead of schedule. If I continue to pay the minimum on my loan, I will pay $111,996.75 in interest instead of the original $116,404.23. The little extra I've tossed at the mortgage has saved us $4,407.58 in interest over the life of the loan.

Total Condo Costs: -$24,729.37
  • (Money paid to acquire the property and get keys: -$7,057.08)
  • (Money Spent to Remodel and Repair Property: -$17,672.29)
How we are breaking even:
  • First Time Home buyer's Credit: +$8,000.00
  • Current equity: +$6,914.81 (assuming property is worth the purchase price) 
  • 2009 Prop Tax Deduction: +$90.10
  • Electrician costs 2010 -$95.00
  • TILE Refund +$1,265.00
  • 2010 Federal tax break +$1,087.00*
  • 2010 State tax break +$461.00*
  • 2011 Home Depot -$12.97
*The difference between what I would have gotten back claiming the standard deduction... and the increased amount from itemizing the housing expenses.*

Current amount in the hole: -$7,019.43

If I sold the condo tomorrow, I'd have to sell the property for $136,303.68 to break even.
  • This assumes a 6% total commission ($8,178.22)
  • Enough money to refund the amount i'm in the hole for ($7,019.43)
  • Enough money to cover the $8,000.00 tax CREDIT i'd have to repay for not living in the property for 3 years. ($8,000.00)
If I wait out the remaining 16 months left on the credit, I'd be able to sell for $122,980.40
  • Assuming 6% total commission ($7,378.82)
  • Enough money to refund the amount i would be in the hole for taking into account for the additional principle reductions from 16 more payments ($4,760.88) 
If I add up what I spend on my condo in a given year, its equivalent to (or less) to what my annual costs would be if I lived in my old apartment complex... So all my monthly expenses are a "wash" since I would have thrown the money away paying for rent.  For 2011 the figures are:
  • Apartment: $14,202.00 for the year, or $1,183.50 a month [this figure includes the rent, trash, water, gas, laundry, & renters insurance, and it assumes I stayed in the previous unit i did the prior year (ie- no security deposit) and signed a new 12 month lease that started in November].
  • Condo: $13,356.24 for the year, or $1,113.02 a month [this figure includes my mortgage, hoa- (which includes water, trash, & gas utilities), taxes, mip, earthquake insurance, and homeowner insurance.]
$70.48 LESS a month than the apartment (which is smaller than my unit)... giving me $845.76 a year I can either toss at the mortgage or use for home improvements while STILL breaking even BEFORE tax deductions are even considered. To date for 2011 I've added: $257.54 in Extra principal and spent $12.97 in repairs. Total: $270.51/$845.76. I'm hoping at the end of the year to take the balance that is left and add it to the principle on the loan to make it break even.

3 comments:

  1. Just curious as to why you kept track of Home Depot expenses and stuff like that in the tally. I've never seen anyone do that before, shouldn't it be a sunk cost?

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  2. A lot of my calculations are based upon the fact that its cheaper to OWN my home on a monthly basis then it is to rent an apartment before tax breaks are even considered.

    Therefore, any expense I wouldn't have had to make if I was in an apartment is getting added to the amount we are "in the hole for" since I look at all my monthly payments as a wash since they would be down the drain renting anyway.

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  3. To add on to that, if I had to repair or replace a door, the stove, or the dishwasher, I'd add that in as an expense since those things are normally fixed in an apartment by the apartment staff/landlord.

    If the washing machine or the fridge broke I wouldn't add those in since those were supplied by me in my apartment (where I get new comp figures every November to use so I keep things current with the market and a new 1 year lease when my old lease would have expired)

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