Real estate math problems? Get help from a professional

Whether you’re buying or selling a home, you’re going to be confronted and perhaps overwhelmed by numbers: interest rates, days on market, loan terms and more. They’re all significant in the transaction. But what do they really mean?

This column is not the place for in-depth analysis of real estate math. That would be a tall order. I hope to convey two things: the importance of understanding what the numbers mean and that there is help available to decipher it all. A 15- or 30-year loan?

Many buyers can shorten their financial obligation by choosing a 15-year mortgage instead of the 30-year variety. The payments on 15-year mortgages are certainly larger, but not, as it may seem, twice as large. If you can handle the bigger monthly expense, you’ll build equity faster because a greater portion of each payment goes toward principal rather than interest. Additionally, the lower rate and shorter term lessen the overall interest due.

With a longer loan term, you have a higher interest rate and build equity more slowly, but you get the benefit of lower monthly payments and, perhaps, increased buying power.

You also still have the option to shorten your loan by making

additional payments when possible.

When negotiations between a buyer and seller stall, each party should think about what the difference in the offers actually means.

To a seller, it means more money at the time of sale, of course. But there could be more to consider. Has the house been on the market a long time? If you decide to stick to your guns on a number, do a little math to be sure it makes finan- cial sense. Should the home linger on the market another two or three months, the cost of keeping the house may be close to or even surpass the amount you’re holding out for. Your move may be delayed and you could end up paying two mortgages, two utility bills, two landscaping bills and so on.

As a buyer, plug the numbers in to see the difference on your monthly payment. It may be that the extra money each month pushes the home beyond your budget, or it could just be a few dollars per month — an amount you may decide isn’t worth it to lose the home.

Don’t be confused by national numbers that have little to do with the local market. The truth is that Texas has many of the healthiest real estate markets in the nation, including Houston. Also keep in mind that, in most cases, real estate investments hold their value quite well, appreciating consistently over the long term.

Make the smart choice and contact a Realtor. Realtors work with these figures and concepts regularly and can help you navigate the financial waters and make sense of the numbers. Visit HAR.com for more information.