Selling House Before Mortgage Period Completes Or At Early Stages?

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.|||I am not quite sure where you are getting your calculations from. The seem abstract.





If you really want to see where you will be at - search for a good amortization schedule on the internet and play with that. Try this one





http://www.mortgage-calc.com/amortizatio鈥?/a>





If you only plan on owning for 2 years or less and with all the other costs of buying a home (about 3% of sales price) and selling a home (about 5-7% of sales price with commissions and costs) you might be better off renting. You also have to factor in that you will have some income tax savings during that time as you will have an interest deduction.





Also, interest is the cost of the money you have borrowered - it is gone. I know the market is flat right now, but you should also be able to factor in a little bit of appreciation possilby depending ont he area you live in.|||You will only be charged interest up to the date the mortgage is redeemed. When you sell the house, you will therefore get the selling price, less what ever remains to be paid on the capital you borrowed (plus fees and maybe an early redemption penalty).|||You also need to consider the fact that if you do NOT buy the house, you will have to continue to make rental payments to live somewhere - so you would need to offset the money you repay as interest with an appropriate amount....|||You would not get back any interest you paid. You would only get the $4,800 plus whatever down payment you made.





To know whether you'd be better off buying or renting, you also have to consider other factors, including:


Closing costs you paid for the loan


Agent's commission (if you use an agent to sell)


Property taxes paid


Maintenance costs


Tax deduction on mortgage interest


Difference between interest payments and rent payments





If you sell the house after two years at the same price, I don't think you'd come out ahead financially.