Real estate values, and thus mortgage costs are usually calculated on a cost per square foot basis, but this measurement must be a fully understood by the seller and the buyer.
The main problem with this method of measurement is that it does not include the size and immeasurable ‘curb appeal’ of the lot, the main reason that real estate increases in value is because the land that it sits on increases at a far faster rate than the house.
The best way to determine the true value of your house and mortgage cost, is to have the land and the building evaluated separately, to give you a total value of the whole real estate package not just the house. As the old management philosophy goes, the sum of the parts is greater than the total. The same holds true in real estate business.
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