Financing Table
Description
This section is from the book "The Better Homes Manual", by Blanche Halbert. Also available from Amazon: The Better Homes Manual.
Financing Table
Table II recognizes the fact that families having the same annual income may not be able to devote the same amount toward the purchase of a home. A family, for example, with several small children and perhaps other dependents, living in a city may not be able to put much aside toward buying a home. Another family with the same income but with no children or dependents, situated in a village where living costs are low, can afford to pay out a very much larger proportion of its income toward buying its home. The overlapping incomes in the table are thus necessary to cover even ordinary differences in the amounts that families with the same income will be able to spend toward a home after they have paid for food, clothing, and other necessities.
The annual expenses involved in purchasing and maintaining a home of a given price may also vary.
The table, therefore, does not attempt to set up arbitrary standards, although it is fairly typical and should be useful as a basis from which to start figuring.
Table II. Table Showing Income, Value Of Home, And Typical Annual Expenses For House And Lot. Section 1. - Cash Payment Of 20 Per Cent Of Total Value
1. Value of house and lot. . | $3,000 | $4,000 | $5,000 | $6,000 | $7,000 | $8,000 | $9,000 | $10,000 |
2. Annual income.................... | 1,200 to 1,800 | 1,600 to 2,400 | 2,000 to 3,000 | 2,400 to 3,600 | 2,800 to 4,200 | 3,200 to 4,800 | 3,600 to 5,400 | 4,000 to 6,000 |
3. First cash payment (20 per cent of value)...... | 600 | 800 | 1,000 | 1,200 | 1,400 | 1,600 | 1,800 | 2,000 |
4. Amount of loan........ | 2,400 | 3,200 | 4,000 | 4,800 | 5,600 | 6,400 | 7,200 | 8,000 |
5. Interest and amortization (12½ per cent of loan)... | 300 | 400 | 500 | 600 | 700 | 800 | 900 | 1,000 |
6. Estimated taxes, insurance, and upkeep....... | 120 | 160 | 200 | 240 | 280 | 320 | 360 | 400 |
7. Total annual expense.. . | 420 | 560 | 700 | 840 | 980 | I, 120 | 1,260 | 1,400 |
8. Savings included in above total (first year)........ | 150 | 200 | 250 | 300 | 350 | 400 | 450 | 500 |
9. Expenses comparable with rent (first year)___ | 270 | 360 | 450 | 540 | 630 | 720 | 810 | 900 |
* Assuming an initial cash payment of 20 per cent of the total value, the annual cash outlay (item 7) in this section is about as low as can ordinarily be arranged for the first few years. The financing charge might be cut down later on, when part of the principal of the loan has been paid off, but the whole debt will be canceled in about twelve years if the payments given in the table are continued regularly. (See General Notes, pages 20.22.)
Section II. - Cash Payment Of 30 Per Cent of Total Value
1. Value of house and lot. . | $3,000 | $4,000 | $5,000 | $6,000 | $7,000 | $8,000 | $9,000 | $10,000 |
2 . Annual income......... | 1,200 to 1,800 | 1,600 to 2,400 | 2,000 to 3,000 | 2,400 to 3,600 | 2,800 to 4,200 | 3,200 to 4,800 | 3,600 to 5,400 | 4,000 to 6,000 |
3. First cash payment (30 per cent of value)...... | 900 | 1,200 | 1,500 | 1,800 | 2,100 | 2,400 | 2,700 | 3,000 |
4. Amount of loan........ | 2,100 | 2,800 | 3,500 | 4,200 | 4,900 | 5,600 | 6,300 | 7,000 |
5. Interest and amortization (12 per cent of loan).... | 252 | 336 | 420 | 504 | 588 | 672 | 756 | 840 |
6. Estimated taxes, insurance, and upkeep....... | 120 | 160 | 200 | 240 | 280 | 320 | 360 | 400 |
7. Total annual expenses. . | 372 | 496 | 620 | 744 | 868 | 992 | 1,116 | 1,240 |
8. Savings included in above total (first year)........ | 126 | 168 | 210 | 252 | 294 | 336 | 378 | 420 |
9. Expenses comparable with rent (first year).... | 246 | 328 | 410 | 492 | 574 | 656 | 738 | 820 |
† Assuming an initial cash payment of 30 per cent of the total value, the annual cash outlay (item 7) in this section is about as low as can ordinarily be arranged for the first few years. The financing charges might be cut down later on, when part of the principal of the loan has been paid off, but the whole debt will be canceled in about twelve years if the payments given in the table are continued regularly. (See General Notes, pages 20-22.)
Section III.- Cash Payment Of 40 Per Cent Of Total Value
1. Value of house and lot. . | $3,000 | $4,000 | $5,000 | $6,000 | $7,000 | $8,000 | $9,000 | $10,000 |
2. Annual income.............. | 1,200 to 1,800 | 1,600 to 2,400 | 2,000 to 3,000 | 2,400 to 3,600 | 2,800 to 4,200 | 3,200 to 4,800 | 3,600 to 5,400 | 4,000 to 6,000 |
3. First cash payment (40 per cent of value)...... | 1,200 | 1,600 | 2,000 | 2,400 | 2,800 | 3,200 | 3,600 | 4,000 |
4. Amount of loan........ | 1,800 | 2,400 | 3,000 | 3,600 | 4,200 | 4,800 | 5,400 | 6,000 |
5. Interest and amortization (12 per cent of loan).... | 216 | 288 | 360 | 432 | 504 | 576 | 648 | 720 |
6. Estimated taxes, insurance, and upkeep....... | 120 | 160 | 200 | 240 | 280 | 320 | 360 | 400 |
7. Total annual expenses.. | 336 | 448 | 560 | 672 | 784 | 896 | 1,008 | 1,120 |
8. Savings included in above total (first year)........ | 108 | 144 | 180 | 216 | 252 | 288 | 324 | 360 |
9. Expenses comparable with rent (first year)___ | 228 | 304 | 380 | 456 | 532 | 608 | 684 | 760 |
% The total outlay (item 7) in this section is based on the assumption that a family able to pay 40 per cent of the value of a home in cash will normally find it best to pay off the loan in installments, at least as rapidly as in the preceding cases. (See General Notes, below.)
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