Is buying a home always better? | Housing | Finance & Capital Markets | Khan Academy

. Welcome back I want to say a little bit about the topic of the topic In my opinion, this is anyone who can actually watch Probably the single most important video I see all the parties I go to as my family Now my wife and I are I live in northern California We are renting I have chosen I have family members, why can't you buy a house? You are on the scene That is the key to life There is a lot of pressure to buy a home When my friends asked, I replied: I haven't bought one yet Because I'm in the housing market It is almost 100% thought that it will return to normal Why would they drop? The organizations I have discussed will work to prove this But I heard from real estate agents My friends are going to reject the post Because they want you to buy it completely Well, isn't it better to buy than to rent? If you have a mortgage or a mortgage for a house to live in This means that every month they make money with the bank It is a form of savings I think these come from a wise idea This is the rule Money while you are renting The wind will disappear in the field In this video I will work only on this assumption In fact, this is only a small matter Let's say I have a choice Let's say there are two houses .

This is home number 1 And this is home number 2 Let's say they are just houses that are the same I live in three bedrooms; Silicon Valley with 2 baths It is a small town I want to stay at home like that Not much different from the house I live in Because the houses are the same Living here is the same experience I can rent this house for $ 3,000 a month Or I could buy this house for $ 1 million Now let's talk about my bank account Let's say I have $ 250,000 Let's see what happens in the future Let's see how much money you have saved So what does the future hold? I'm renting When paying once a year Let's see how much money goes out of my pocket I had to pay $ 3,000 a year If I multiply $ 3,000 by 12 months, I lose $ 36,000 Then I will look at the loss Because I use it when renting Because the rent is $ 36,000 a year Yes, because I have nothing to do To deposit in a bank I didn't buy it Let's say I can save at a bank Suppose I put it on a CD And I got 4% And you see, that's what I think is $ 10,000 That's 0.04 In fact, I earn $ 10,000 a year So I got $ 10,000 So that adds up to $ 10,000 per year Good weather in Silicon Valley The privilege of living is Each year, I have $ 26,000 out of my pocket This is a promising prospect My family brokers Due to pressure from factory mortgages Would I buy a house for $ 1 million? Most people who buy me a house for $ 1 million But that's more than $ 250,000 I only have $ 250,000 So I need to borrow $ 750,000 So I made a $ 750,000 mortgage I'm going with this little idea More on that in the future It has to be complicated When you make a monthly payment on most mortgages, you pay If your monthly payment is in the beginning, It's just the interest of your loan Then your loan portfolio You will need to pay a little extra for the reduction Such payments are called rules You can only learn the interest rate on the loan But the interest rate is the same Essentially, if you're only going for a thirty year mortgage If you are paying every month, This is a little bit more than what you have to pay, and you have to reduce this amount The simplest form of this statement is: You have to go with the mortgage contract Other bonus and debt laws Is to cancel These are the same ideas Now, if I were only 25% off, I bought a $ 1 million home I'll have a $ 750,000 mortgage I don't know what is a good standard 6%? Let's talk about the 6% interest rate I told you how much I had paid in interest I have to pay $ 750,000 at 6% interest every year So 0.06x $ 750,000 equals an interest rate of $ 45,000 This is the money that comes out of my pocket If the monthly payment is a monthly interest rate, It means coming up with a new idea I'm paying about $ 3700-338 per month In fact, my mortgage contract sometimes pays around $ 4,000 a month So I have to pay the interest This is to reduce the whole value of the loan It will take about 30 years to complete all this debt Over time, interest rates are low There will be more rules The simplest form is the interest rate I'm paying $ 45,000 a year When I talk to a party That's it A mortgage payment contract is something to be careful about before paying it off The sum before the interest payment is calculated It was used as an interest on my contract Costs can be deducted from my paycheck That's less than the $ 45,000 I actually earned You can tell the IRS So if I say 30% before I pay the interest What is saving money? I can maintain 30% I have to pay $ 15,000 for taxes How does it work? Well let's think Let's say I can make $ 100,000 a year Normally you have to pay 30% Normally you have to pay $ 30,000 in taxes That is true Collected to protect the house No tax Now I have interest In fact, I'm one year old He told the IRS that he could find $ 55,000 Let's talk about my 30% tax In fact, if only these taxes were reduced The simplest form would be to assume that my taxes were $ 3,000 I am now paying the IRS $ 16,500 So how much tax have I collected? .

$ 45,000 coming in Customs must collect $ 13,500 in taxes So let's talk about adding $ 13,500 Now what else is there to solve for this equation? Can I get $ 250,000 interest? Fine Not at all I have to use the expenses that reduce the down payment for my home So I have no interest But what I have is I have to pay customs for my products In California, the property tax is Only 1.25% pay So, is it just 1.25%? So tax is a product tax In fact, if the tax is actually deducted 0.75% or 1% Let's talk about 1% with simplicity Property taxes. Rest 1% times $ 1 million. That equals what? 1% of $ 1 million is another $ 10,000 a year in property taxes. And notice, I'm not talking about what percent of me mortgage goes to principal pay. I'm just talking about money that's being burned by owning this house. So what is the net effect? I have a $ 13,500 tax savings. I have to pay $ 10,000 – actually I have to pay a little bit more than that, but we're getting a little bit of income tax savings on the deduction on the property taxes. And then I actually have to pay the $ 45,000 of interest that just goes out the door.

So I'm paying $ 41,500. Notice, none of this $ 41,500 is building equity. None of it is getting saved. This is money that is just being burned. So this is a completely comparable value to this $ 26,000. So in this example – this example isn't that far off from real values. Out here in the Bay area, I can rent a $ 1 million house for about $ 3,000. But in this situation I am burning, every year $ 41,500, where I could just rent the same house for $ 26,000 out of my pocket, when I adjust for everything. And then people a couple of years ago said, oh, but houses appreciate. And that's what would make it up. But now you know, very recently – we know that that's not the case. And in the next video, I'll delve into this, and a little bit more.

I'll see you soon. .

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