Re: Buying house, interest only loan the way to go?
200k * .80% = 160k
160k @ 30yr/7% = $1065/mo
Assume tax and insurance @ 4k/yr or 335/mo
about $1400/mo PITI.
This doesn't include utilites, which you would pay anyway.
$1100/mo in rents leaving you paying $300/mo. Can you get a 4th person to rent?
In 5 yrs the principle is $150,611. Depending on appreciation you have now gained about $9k of equity on your $40k investment. Not a bad return.
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