Monday, May 24, 2010

The not so big Mortgage

A call for questions!
Our architect will be coming over for supper tomorrow and it will be a good opportunity for us to know each other on a more personal level.

I already have a list questions for a profile interview.
Please let me know if you have any questions you want to add to the list?

Relieving Mortgage stress:
In the meantime, just thought I would post about the financial sense. I think one of the main concerns about having your own home in Japan is getting over sticker shock. This is where extremely low interests in Japan help relieve some of the stress.

What you get in Japan for ~1450$/month:
You can go for a 500K USD@1.2% and over 35 years it will cost you about 110K in terms of interest payments.

What you get in USA for ~1450$/month:
You can go for a 355K USD@3.5% and over 35 years it will cost you about 255K in terms of interest payments.

So which one looks better?
Well the Japanese mortgage looks better now. But the reality is more complex.
It's not a complete apples to apples comparison since homes in the US (the last 4 years not-with standing) grow in value, whereas homes here depreciate in value. But in a way that's my point. In Japan, You win some. You lose some. But a home is home, and our plan is to just live in and enjoy it. Taking a look at the big picture...the mortgage does not look so big after all.

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