Can You Afford a Million-Dollar House?

HouseSomething worth a million dollars is a colossal undertaking in all manners. Aside from the figures, fulfilling payments for an investment this size will drive anyone to their emotional edge. That’s why choosing which house to buy require serious deliberations before making a decision. It’s nothing like buying an expensive television, where one only needs to be frugal for a few months.

Financing a Million-Dollar Purchase

A considerable amount of money is needed to even think about a million-dollar purchase. A person must have at least $200,000 yearly, after-tax salary. In a major city, mortgage will cost around $60,000. Plus, there’s the interest that comes with the mortgage loan. 30 years fixed is a common mortgage type for Americans, where they need to pay $5,000 monthly amortization for three decades.

The Echelberger Group reminds people that the first headache a buyer will have is the down payment. Before anything starts, they must cough up about $200,000. For some, that’s the amount of a house. But this is the price one will pay for choosing a property worth seven figures.

Looking for an Alternate

Losing interest in buying such an expensive house can hardly be a disappointment. If the buyer can afford it, then yes; but for most people, it’s something they can pass on. An ideal alternate is a house that’s worth less than what’s affordable. Why’s that?

For families, it’s only wise to have some funds tucked away in the bank. Taking care of kids requires money. In addition, a house of less worth doesn’t always mean a buyer is settling for an uglier house. More often than not, it just needs work and it’s good as new again. That’s why the good estate agents always say don’t discount the ugly houses.

Money can buy a big property, but that doesn’t mean guaranteed satisfaction and happiness. A million-dollar house can only give so much before the buyers realize that they overpaid for something they don’t need. Think before buying, and know your limits.

Posted on by Tyrone Archibeque in Money Times

About Tyrone Archibeque

Tyrone Archibeque is a Fine Arts instructor at a university in Texas. He also runs an online clothing business with his sister.

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