More money has been losttoindecision than was ever lost to making the wrong decision. The economy and the housing market have caused some people to take a “wait and see” position that could cost them in lost opportunities as well as almost certain higher costs in the future.
To illustrate what the opportunity cost might be, let’s compare what the value of the down payment two years from now would be if it was invested in a certificate of deposit, the stock market or used to purchase a home today.
A 3.5% down payment on a $175,000 home is $6,125.00. If it was invested in a CD that would earn 2%, a person would have $6,372 in two years. The earnings would be taxedasordinary income tax rates. It wouldn't earnmuchbut it would be safe and secure.
The same amount would grow to $7,013 in the stock market if you picked the right stock or fund and it yielded 7%. The earnings would be taxed at thelong termcapital gains rate. The return could be greater but so is the risk involved.
If this person were to purchase a home today that appreciated 2% in value over the next two years, the equity in the home would grow to $18,769 due to value going up and the unpaid balance going down.
The question, we all must ask ourselves is “where should our money be invested?” TryYour Best Investmentto see the difference it will make based on your price range, down payment and earning rate.
Author:Melissa Hardman Phone: 319-269-0304 Dated: February 12th 2015 Views: 992 About Melissa: ...
My name is Carl Ericson and I am a REALTOR with Oakridge Realtors in Cedar Falls, Iowa. I am in my eleventh year as a REALTOR. I work in Cedar Falls, Waterloo, and surrounding communities including Waverly, Hudson, Dike, Denver, and Evansdale.
I specialize in residential sales, investment properties, and new construction. Through hard work, experience and knowledge I become my clients real estate consultant. I helps my clients make sound real estate decisions and consult with my clients when they are contemplating a future real estate move.
I graduated from the University of Northern Iowa with a B.A. in Management: Business Administration and a Real Estate minor. I was involved with Rho Epsilon real estate club while I attended the University of Northern Iowa.
I have called the Cedar Valley home since 1987. I grew up in the area and believe that the Cedar Valley is truly a great place to live. I believe the Cedar Valley offers many features for people to enjoy including: arts and entertainments, sports, recreation, shopping, quality jobs, a great atmosphere, and much more.
If you are thinking about a real estate move, please contact me for a personal consultation.
Carl Ericson | Realtor®
Licensed in Iowa | #S43269000
Oakridge Realtors | 3313 Terrace Drive, Cedar Falls, Ia 50613