How I Owned My Home For $132 Per Month and How YOU Can Too! Owning Beats Renting Every Time!
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In today’s video I go over exactly ALL the numbers involved in me buying and selling my home, showing you the financial details of #HomeOwnership, including #mortgage, #taxes, #principal, #interest etc.
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I got the idea for this video by watching Graham Stephan’s $78 Tesla video. I’m sure you’ve seen many videos like this on YouTube where they tell you how to live in a house cheaply or even for free and they are all talking about house hacking. This is when you buy a house, condo, or a duplex and then rent most of the house out to other people, usually by room.
I bought my condo in Chicago in May of 2019, for $285,500. I put down a first earnest money of $1,000 and second earnest money of $9,000, which eventually became a part of my down payment.
I decided to put 20% down payment because I did not want to pay for mortgage insurance. At closing I got a refund of $1,623 because I had a bit of an overage, and I got an additional refund from Redfin of $514, which is their buyer refund. So, all in all, I spent $60,398 upfront to buy my condo.
Next, let’s talk about principal and interest. I got a mortgage with a 15-year term at an interest rate of 3.75%. My payment was $2,063.27, which included escrow of $402.29 to pay for my property taxes, and Principal and Interest of $1660.98 ($998.80 + $662.28). A year later, I refinance into another 15-year term mortgage with an interest rate of just 2.5%. Now my payment became $1,423.93, which was all going towards Principal & Interest. Over the 30-month period that I owned the home, I paid a total of $15,572.75 in mortgage interest, and about $25,318 towards principal.
For 2019, my property taxes were $4,653.24, for 2020, they were $4,812.94. Property taxes went up a lot in 2021, so my property taxes prorated to October 30th were $4,342.31.
Over the 30-month period, I spent $5,070 in HOA fees. For repairs, $1,800.
Total of: $92,172.70.
I listed my condo for $315,000, after several days of going back and forth, we agreed to a purchase price of $303,000.
I also had to pay 2.5% buyer’s agent commission – $7,575, and 1.5% seller’s agent commission – $4,545, prorated property tax credits for 2021 of $4,344.90, title fees of $3,786.50 and legal fees of $400 for my attorneys, for a total of selling fees of $21,584.40.
So removing the selling fees from the sale price, we get $281,415.60. At the time of the sale, I owed $202,225.61. Removing the loan payoff, we get $79,189.99. If I subtract my total 30 month expenditure of $92,172.70 from this amount, we get negative $12,982.71. But remember, the HOA fees I paid actually paid for utilities for me, so I’m going to add that back in. So we get a total of negative $7,912.71.
Let’s now compare what it would cost to rent this place instead. Over the 30-month period, if I had rented instead, I’d have spent $66,000 on rent! $66,000! And that is assuming my rent would not go up. Instead I spent just $7,912.71. So I saved $58,087.29 over a 30-month period.
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