Why Should you Buy??? Let's break down the mortgage pay 

The housing market has started a steep creep and for Millenials, the decision to remain on the sidelines can have a negative impact to future net-worth in the opinions of some. As you know the age-old argument for non-home buyers, if I invest in XYZ it will net me more than divesting that into a home, but the argument usually stops when you ask the questions where are you living now??? That question leads to renting an apartment and than you ask where does that money go, and then they go your maintenance is high, and I tell them your paying maintenance anyway the apartment complex doesn't just eat the costs and on average the maintenance calculation is 1% per year for the value of your home (Example $200,000 home cost you $2,000 a year..$200,000 x 1%). So over the course of 30 years, your costs will be $60,000 from my example, let's say your house maintains its value and there is no inflation on your home what is your total costs of ownership, let's use the $200,000 model.

Interest 
Is it the totality of $200K, well maybe if you paid cash and some folks rarely like to give that high of amount away to a bank though it saves you from the number one killer of home ownership the dreaded interest payment let's say you use the conventional standard of 20% down on $200K (200 x .80), and you end up dropping $40K and getting a mortgage on $160K ... let's play the market right now and your costs are an even 5% using the multiplier formula below ($200K x 1.932558) over 30 years your paying a grand total $309,209 that's just at $160K so folks PAY IT OFF AS SOON AS YOU CAN.... Your total costs are the rounding up $40K down plus the $310K which gives you a $350K payment before you say good-bye to the bank man. 

Multipliers
For 30-year mortgages, here are multipliers (the "M" value in the formula) for interest rates in half-percent intervals from 4 percent to 10 percent: 4 percent, 1.718695; 4.5 percent, 1.824067; 5 percent, 1.932558; 5.5 percent, 2.040404; 6 percent, 2.158382; 6.5 percent, 2.275445; 7 percent, 2.395089; 7.5 percent, 2.517172; 8 percent, 2.641553; 8.5 percent, 2.768089; 9 percent, 2.896641; 9.5 percent, 3.027075; and 10 percent, 3.159258.

For 15-year mortgages: 4 percent, 1.331438; 4.5 percent, 1.376988; 5 percent, 1.423429; 5.5 percent, 1.470750; 6 percent, 1.518942; 6.5 percent, 1.567993; 7 percent, 1.617891; 7.5 percent, 1.668622; 8 percent, 1.720174; 8.5 percent, 1.772531; 9 percent, 1.825680; 9.5 percent, 1.879604; and 10 percent, 1.934289.

Renting
So your house costs as much as raising one child up until 18 years old, same old answer where does your rent money go because no matter how you cut it your rent payments will be the same. This doesn't include the interest that you perhaps will be making on another vehicle for investment. So I did some jumbo math for the rest of your payments and calculated that you would be paying a monthly amount of $1500 for a 2bdrm 2bth home in a middle-class area.  That $1500 is FOREVER...do I need to continue, your $1500 is forever and it will fluctuate depending on how an investor such as myself feels the price of the rent should be for MY COST BENEFIT.,, Yea I'll pay property tax forever let's say that is $6000 a year, let's say my HOA is $500 a year, but my house is paid off that would mean that my total payment per year $541 per month vs your $1500 a month forever so do that for the next 30 years and where do you end up ($12K x 30) = $360K to my pocket advantage serve me. 

If you ever so wanted to truly figure this out without the writers 10 Minute math, click the icon with the calculator to your left , putting your cursor over the home mortgage calculator, and let the drop down work its magic, you will see on the final drop down a rent vs own calculator that puts the work for you in detail be advised it will stop the rental payment at the 30 year mark so the forever remark really won't matter. 



Have fun this labor day, Millenials buy (Yes this is coming from folks in realestate :-) )