if you live an additional 10 miles away from work, that means that (most likely), two cars are driving an additional 20 miles a day – an extra 40 miles per day. Stay with me here.
For every $100 in mortgage payment, one can afford an additional $16,000 of a home.*
Assuming gas remains around $3/gallon, and that a vehicle gets 20 mpg, a family would be paying at least an additional $6 per day in fuel costs.
Using these assumptions (not bad for an English major!), that additional 10 miles further equals an additional $180/month and an extra $2160/year.Â Thus, if you live a little bit closer, you could purchase a $232,000 home rather than a $200k home. If you have kids, factor in the soccer practices, tae-kwon-do, dance lessons, etc. and living closer makes more sense than ever – now if one can just find one of Dennis Rooker’s $225k townhouses …
*Using 6.125% 30yr fixed thanks to Carl.