To buy a $1 million home, you have to be prepared to pay approximately $6,000 per month in mortgage payments.
So, you want to buy a home? Ok, cool. And the house that you found is a $1 million home. Can you afford it? Well, that answer depends on a couple of things. And the most significant thing is your income. A home this costly will put you back, even if you put 20% down, about $6,000/month as your mortgage payment. Fairly costly when you also factor in upkeep and other payments and whether you can answer the question, “is it worth it?”
According to Fortune, although home prices will drop in the upcoming months, the interest rates will more than likely remain at an all-time high. The Federal Reserve increased interest rates in an effort to tamp down inflation. So a $1 million home could end up costing even more with high-interest rates.
Although interest rates may slow down in 2023, you need to take these into steep consideration because you must pay them as you make your monthly mortgage payment. The interest you pay is based on the outstanding balance. Although interest rates are set by the government, you do have the power to get the best one–which is what you want. And especially with a $1 million home, you need the best rate, so you’re not paying more than you need each month.
Of course, if you’re planning to purchase a $1 million home, you don’t have to choose a home per se. You can pick a condo or even an apartment. This may be a good move for possibly renting it out at some point if you want to diversify. Build-to-rent apartments are typically a good investment, especially in an economy where rent can fetch a high price.
Another exciting thing you can do if you do have money for a $1 million home is to buy a lower-cost home and use the money to “flip” or renovate it. You can either resell it for more than you purchased it for or end up living in a home that is precisely the way you want it.