Blog monkey's cousin is shocked by possible mortgage payment
Blog monkey, his cousin, and I were talking the other day about mortgage rates. Blog monkey's cousin, Antonio (pictured above), was telling us how he was going to be moving soon. He had heard about some house going up for sale in England. The house is listed for $138 million. It is the most expensive house in the world. He figured that it would be a great place to move to because of all the open spaces for him to swing through. He doesn't have great math skills, or a sense of what money is worth (he is a monkey), so he asked me what the mortgage payment would be. I figured it up for him at 5.875% for 30 years. Antonio was shocked (as seen above) when I told him that his mortgage payment was going to be $ 805,330.54 a Month. He obviously was quite disappointed. He has just recently fallen on hard times. He had just run out of the money that he had won in a settlement with careerbuilders.com. They had used his likeness in a recent advertising campaign, without his permission. Anyway, he is now unemployed; therefore he has no income.
At least he won't make the same mistake that many people make every day. I have seen many people buy way too much home. They have huge incomes, but they also have lots of monthly obligations. They are then as shocked as Antonio to learn that they can't make payments comfortably about 2 years in. A house can be a great investment, but it can also be devestating on your cash flow. Don't overextend yourself. Sometimes there is no going back. Remember, just because you wear clothes, doesn't mean that you are automatically smarter than a monkey.
World's priciest 'for sale': $138M (USA Today)
****Please make note: Antonio was not harmed by the flash photography.
Pete:
I think you make a great point with this entry, but let me take it a step further. You implied this, but didn't emphasize, the problem with the big home is not necessarily the big payment, but the bigger expenses that go along with it. [Although I'm sure all your smart readers knew what you meant, I think Antonio needs further explanation.]
It's the higher utility bills, extra maintenance, paying someone to plow the snow on the big driveway or take care of the 58 acres of gardens and the bowling alley in that $138m English property.
Of course, your readers recognize these things on a mortgage; but how about on other things? Are we smart on those? We can afford putting in a pool - but not the chemicals and water, and the weekly pool parties. We can afford cell phones for everyone in the house including the dog - just don't talk on them.
We can afford the boat payment - just not the dock fees, gas and other expenses to enjoy it.
You are right PTP Man. We get caught into looking at the initial capital outlay and think - "I can do that!" without regard to the fact we've bought an asset and a negative annuity that you will need to pay monthly to enjoy your asset.
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