Selling House Before Mortgage Period Completes Or At Early Stages?

Question

I am planning to buy a house to avoid paying high rent and will take a mothly repayment mortgage with minimal deposit.As I know,the for first few years,the monthly installments are composed of mainly interest and small part of capital repayment(80-20 ratio).That means for first few years I will be paying interest more and will have very low equity in house.Now during that period if I want to sell house,am I going to loose money considering following:

A.The property price remains almost same.The property does not get appreciated in 2 years.

B.My Income remains same.

Example:
At the time of buying:
Property Value: 100,000
Total to be returned: 150,000 (50,000 is Int)
Monthly Installment: 1000 (800 Int,200 Cap repay)

After 2 years:
Property Value: 100,000
Capital Repaid: 4,800 (200*24), Interest Paid: 19,200
Money Paid: 19,200 + 4,800 = 24,000

Now if I sell the house will I get 24,000 as part of selling (after paying off everything to the lender) or just 4,800.

Answer 1

You'd get 4,800. The interest is simply an expense along the way. Your equity is what you'd get back and that would only be 4,800. With typical sales commission of 6% of the sales price, you'd have a 1,200 loss if the buyer paid all other costs.

At current rates, paying 1,000 per month on a 100k mortgage would be on a 12 year schedule and you'd actually pay down about 11,700 in principal, so after a 6,000 sales commission you'd be looking at about 5,700 net.

Answer 2

you won't get decrease back any activity you paid. you're able to easily get the $4,800 plus regardless of down charge you made. to comprehend whether you would be greater advantageous off finding out to purchase or renting, you apart from mght might desire to evaluate different aspects, inclusive of: ultimate expenses you paid for the loan Agent's value (in case you employ an agent to sell) aspects taxes paid upkeep expenses Tax deduction on loan activity difference between activity funds and hire earnings case you sell the domicile after 2 years on an identical cost, i don't think of you're able to come out forward financially.