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.


  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?

  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.

  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)