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[Ourobolus]

I'm about to close on a single-family home in the VA/DC/MD in the next month, and so far it has been going smoothly. 3.25% 30 year fixed, about $260k. I used my VA loan so I didn't have to do a down payment and I have no PMI. My mortgage is about 1,500/month.

No complaints here.

 

[xavi42]

You can pay rent all of your life, you are just paying off someone else's mortgage. At the end of the day, they have a house they own (but you paid for), and you have nothing. Just hope that there is not too much inflation, otherwise the rents will continue to skyrocket while someone else's mortgage stays the same.

 

[bwtw]

People really need to stop making the straight comparison between rent and mortgage payments. They are not the only difference in costs between renting/buying!

 

[RukusProvider]

I'm absolutely serious. I don't know about you but I only make ~$30k a year. I start a new job in twelve hours with a substantial increase in pay but I still won't be cracking $40k.

What you are able to save is relative to what earn.

At 40k a year, saving a 100k is asking a lot but no for someone who is making say $150k a year.

Even the person making 150k and saving of 100k is going to have a tough time is a place like NY or the bay area. Especially if they want to live in a good area.

It's all relative. Again, look up affordability calculators and start plugging in REALISTIC numbers and you'll have a good of your affordability range.

Keep in mind loans these days are very strict so they won't lend to you unless you pass strict guidelines.

 

[Joates]

Thank you. I'm not anti homeownership, but this bill of goods that homeownership is an always a good investment is a myth.

... Always? Who ever said it was always a good investment? People were just saying in most cases the benefits of owning / paying towards owning a home is a better investment than renting...

There are bad housing investments just as there are bad securities investments.

 

[Skel1ingt0n]

I can't speak for other areas,but here in the Austin area you can get into a nice 2000 square foot home in a new development with a net of zero down, with a mortgage of around $950 a month. There are terrific down payment assistance programs available as well like this one. I've not seen anyone with a 620 mid score or better not be able to walk into any of these new home developments in the area and not get almost zero down to coming out ahead after closing. Because the underwriting process is all electronically underwritten these days, if you have the 620 you are in regardless of what you think your finances look like in my experience.

Really?

I'm 24 with a ~700 credit score, that I expect to be a ~750 within the next year when I pay off my credit cards. I could probably save up like $5K for a downpayment.

Does your example scale? On my salary, living alone, and traveling a lot, I have no need for 2Ksqft. But would you wager I could snag a new, smaller house for say, $750/month? If so, that definitely has me intrigued.

I'm living near Kansas City, where the cost of living isn't absurdly high; aka New York or LA money.

I haven't really looked into a house, as I've always assumed it's out of my reach right now. Which, it still would be at $950/month. But $750/month would be do-able.

 

[MechDX]

I payed 123k for a 2009 sqf, 4 BR 2 bath house in Texas.

 

[Stinkles]

Mortgages

shouldn't have made me laugh. did anyway.

 

[VanMardigan]

Can't. Like they said, a decent daycare in PR costs WAY more than 200/month, and the private school is located in the next street after my wife's workplace (school is 745am-230pm and she works a 8-5PM). Right now, school at 200/month with meals included is a godsend.

We could get a house right now, but money would be REALLY tight for the next 3 yrs (at least until we pay off the 20k loan), and if there is an emergency, we would have to tap into my savings, which there arent a lot to begin with.

No other way to put it, you are awful with money. Sit down, do a budget. With what you've posted here, you should be able to save massive amounts of money.

 

[Oracle Dragon]

A cousin of mine bought a new house about 6 years ago. She put like 10% down and put the rest on a mortgage. The note was for about 180,000. Her home is now worth only 65,000 so she's bailing. When I heard that, I couldn't believe it. It's not in the best part of town, but it's a newer subdivision, in one of the top 10 largest cities in the country. She was the original owner. It's single story, 3BR, 2 car garage, maybe 1700 square feet. $65,000...

Is the property being under water the only reason she's selling? Shes likely paid off at least some principal after 6 years, but if it's only a case of the value being down why eat the remaining $115 000? It's not like the bank is going to smile and say "Don't worry about that, better luck next time!"...

 

[eastmen]

They're just so expensive. I'm 25 and despite working a 9-5 for the last four years, I've never been able to afford to move out. Now my family's going through some tough times and we're in the process of losing our current home and I kind of need to step up to the plate and get us a place to live. Looking at home prices is shocking, to say the least. I understand that people get mortgages and pay these things over the course of several years but even that seems daunting. I'm not quite sure what to do and I just needed an outlet to vent.

Why are you loosing your current home ? Are your parents behind payments ? I think it be easier for you guys to try and save the house than to get a new one.



Anyway I live in north jersey and in bergen country the houses are expensive a 3 bed 2 bath is about 400k. So my gf and I are movin further west and the houses are around 300k. We are saving up the 50k we want to put down now. We factor 2 years savings to hit that realisticly .We are also going to get married and are trying to time it .

 

[Featheredkitten]

I'm actually on my second house, my first one was paid for but we moved so it got sold, and I bought one up here. I only have a $48000 mortgage, but of course I put more than half down so.....

 

[criesofthepast]

Move to south america where shit is cheap and live like a king.

 

[Chun-Li On A Bike]

The cost of food is going up so much I really don't see how the house market can be handled easily from that too.

I think a lot of people spend a lot of money on things they don't need though.

Add in the costs of internet, cell phones and other various things that people coudn't or didn't always have 20 years ago. That is a lot of costs in it-self but when you think of how many people don't actually make more than 2,000 a month then shit gets more real.

I do admit that most people over eat and eat badly and a lot of costs of food is attributed to this.

Also, when people buy fast food and they order whatever they want, or they buy things from stores that have a much higher mark up on candy and snatch foods. A lot of people are spending way more than they could ever iamgine if they actually added it up.

I know I have spent 8 to 9 dollars many times at fast food places because I actually quite enjoy a grilled chicken sandwhich more than a burger most of the time.

Add it up, for a lot of people who make 2,000 or less a month that is much less than 25,000 a year. Add in all the other costs of what they eat, phones etc and most of that is already gone.

It can be easy to save and not spend, but most really don't do that. I think most people have less than 500 a month to spend on a house or apartment, so I'd put that into perspective for those of you finding it hard to do with 50,000/year plus jobs.

Basically, most people can't get those houses that are 200,000 unless they have two jobs and or they have a partner with a ok paying job as well.

 

[Death Dealer]

Is the property being under water the only reason she's selling? Shes likely paid off at least some principal after 6 years, but if it's only a case of the value being down why eat the remaining $115 000? It's not like the bank is going to smile and say "Don't worry about that, better luck next time!"...

She's doing a short sale on the advice of my aunt who is a broker. The whole situation sucks for my cousin. Even though she's always made her payment, she has zero equity since the value has dropped so much. My aunt says it's not ever going to be worth what she paid for it.

She's divorced and her kids are in HS now and living with their father, so she doesn't even need a house that size anymore.

The thing about it that amazed me is that a house like that is only worth $65,000 now.
Like I said, it's not in a good area, but it's not waay out in the suburbs either. It's only a 15-20 minute drive from downtown. It's a nice place. Not like those houses you see in Detroit.

 

[Oracle Dragon]

... Always? Who ever said it was always a good investment? People were just saying in most cases the benefits of owning / paying towards owning a home is a better investment than renting...

There are bad housing investments just as there are bad securities investments.

I don't think it's about good vs bad housing investments... it's more that people just BUY a house, it is expected and it is automatic with "well a house is an investment". That's simply not true, beyond it being a potential net loss if things go south. It's only an investment if you do something with it, but most people don't. That's well and good in and of itself, but you shouldn't buy a property simply because you heard they were "good investments".

The same can be said of renting as well. In general it is cheaper to rent than to own (there is much more to home ownership than the mortgage payment!) but if you don't do anything with the remainder you are one of the people "wasting money paying rent".

The best advice for the future is to live below your means, but I'm sure that well all know a large selection of people who live "right at" their means, weather they are renting or owning

 

[Joates]

You must understand that for most people a house is not an investment. Something is only an investment if it makes you money. Houses do this (sometimes) when you sell them. If you buy a home and never sell it, it's not an investment.

Oh wow. So if I buy APPL securities and the price goes down it wasnt an investment?

Also, if you buy a home and never sell it, it is an investment because it increases your net worth. Which is part of your estate.

If you rent and use the difference from owning to grow your financial future, you are doing a lot better than most homeowners who were "too smart to rent".

I also love how renting leaves you somehow with way more money to invest and that somehow you will only make excellent investment decisions in all areas other than real estate apparently...

 

[Featheredkitten]

I don't think it's about good vs bad housing investments... it's more that people just BUY a house, it is expected and it is automatic with "well a house is an investment". That's simply not true, beyond it being a potential net loss if things go south. It's only an investment if you do something with it, but most people don't. That's well and good in and of itself, but you shouldn't buy a property simply because you heard they were "good investments".

The same can be said of renting as well. In general it is cheaper to rent than to own (there is much more to home ownership than the mortgage payment!) but if you don't do anything with the remainder you are one of the people "wasting money paying rent".

The best advice for the future is to live below your means, but I'm sure that well all know a large selection of people who live "right at" their means, weather they are renting or owning

I've actually heard that if you have $20000 for a down, the more sensible thing to do is rent and put it in the market, or a CD or something, so that you're earning the interest, especially if you don't have any reason to buy a house.

A good reason to buy a house: Getting into the good school district.

 

[PhantomR]

Lol, you can forget about buying a home here in the Seattle area without a mortgage. Housing is so damn expensive here it's laughable. And let's not even get into how ridiculous a lot of the rental prices are as well.

 

[ATF487]

Really?

I'm 24 with a ~700 credit score, that I expect to be a ~750 within the next year when I pay off my credit cards. I could probably save up like $5K for a downpayment.

Does your example scale? On my salary, living alone, and traveling a lot, I have no need for 2Ksqft. But would you wager I could snag a new, smaller house for say, $750/month? If so, that definitely has me intrigued.

I'm living near Kansas City, where the cost of living isn't absurdly high; aka New York or LA money.

I haven't really looked into a house, as I've always assumed it's out of my reach right now. Which, it still would be at $950/month. But $750/month would be do-able.

If you could find a place with no money down, you could probably afford something around 160k. Just did it with a finance calculator, assumed a 30 year mortgage and a fixed rate of about 4%.

That's assuming $750 as the mortgage payment, though, there are other costs...

 

[Oracle Dragon]

Oh wow. So if I buy APPL securities and the price goes down it wasnt an investment?

Okay, sure, in the dictionary definition of the word it was. I was trying to describe it as people "understand" it, an "investment" is something that you get value out of. So if your AAPL value went down and then you cashed out resulting in a net loss it was a "bad investment". If you stuck it out till you could exit at a profit it was a "good investment". If you buy AAPL and never sell, what is it? It's an investment according to the dictionary but its more of an asset. It could have value, if you did something with it.

So if you purchase a home, where is the value? I've seen people use words like "security", "sense of ownership", etc. But these are intangibles. If you are calling a home an "Investment" where is the tangible value in it?

Some people buy a house much less than they can afford and try and grow the difference, sure. Some people use the equity in their home they have managed to pay off to secure some sort of loan and invest that, that could work to (sometimes). For most people though, they don't get any value out of their home unless they sell it (and hopefully profit).

I'm not trying to come across as anti-home ownership, I am a home owner myself. I just try and discourage people from leaping directly into home ownership simply because "owning a home is a good investment and renting is a waste of money". If you understand why and how your home can become said "good investment" then by all means take the plunge. But I think a lot of people buy a property with those words foremost in their mind, but they don't really understand them.

Also, if you buy a home and never sell it, it is an investment because it increases your net worth. Which is part of your estate.

But those things don't mean anything if you don't do something with it. If I don't leverage my net worth to do something, what is the difference? I guess if you are a strong believer in family values you could die with the house left unsold and leave it to your kids, and then they could get the value out of it. Which has it's merits, of course.

I also love how renting leaves you somehow with way more money to invest and that somehow you will only make excellent investment decisions in all areas other than real estate apparently...

Of course renting won't make you magically make smart investment decisions. It does give you the potential to do something with the money you are left over with vs owning. As with all things in real estate the price varies strongly with location, but in general once you factor in mortgage, taxes, maintenance, utilities, etc, renting is reasonably cheaper than owning. (NOTE: I'll never call renting a good deal in terms of price per sq ft its likely much more expensive than homes you are seeing. But the actual quantity of dollars you pay every month would be less, giving you an opportunity to do something with that difference).

 

[greepoman]

Definitely is situation specific but in my case I could foresee living in that house for the rest of my life so it made much more sense to buy rather than rent. Though selling a house is never a fun experience so if you want to be mobile at all I would just rent.

One thing I definitely like is the my housing costs have been a lot more stable even with increases in property tax... whereas the place I used to rent has doubled their price in the last 15 years.

Edit: Question for renters...does your rent ever go down or do you need to move to take advantage of 'deals'?

 

[Paper Fox]

I just bought a house with my boyfriend. Buying is definitely doable if you aren't shit with money. I work an average job, I'm not rich by any means, and I still managed to pay off my university debt, buy a nice new car outright, and put a 40k deposit on our home with my own money. So yeah, save like a bitch and you'll eventually be able to buy a house.

 

[teh_pwn]

Are you fucking serious? ... Are you fucking serious?


The only, ONLY, reason you could even afford house by saving up the entire amount is because of the existence of mortgages. If everyone followed your advice, you, yourself, would never be able to afford your own home. For fuck sake, if farmers took your view of thing we wouldn't have any food, none, zero, no food; as debt allows farmers to actually, you know, farm. I sure hope that you not just buy a house, but buy a farm and live a subsistence life because, god forbid you benefit from modern finance.

That's incorrect. I'm going to buy my house in full. Engineering salary + investing heavily in stock ETFs + apartment + 10-15 years compound interest = house without interest. You don't *need* to own a house. It sucks that it's impossible for people to do it without saving up or getting into debt, but that's society for you today.

Not having to maintain a house gives me more time to work longer hours and advance up faster too.

 

[Joates]

.

The gist I get from your post is that people are ignorant on the matter, therefor homes are likely a bad investment.

Well, Ive got news for you, ignorance on any level about any of the investments you make will not turn out well. Not in housing, not in securities.

And dont talk about it not being an investment because they choose not to sell, because they at least can. Renters dont gain equity, its quite simple actually.

 

[Hari Seldon]

Talk to a realtor, determine how much you can spend per month prior to going in, and a good realtor will guide you through the process.

It all depends on where you live though, unfortunately. If your on the either of the coasts or in huge cities, you're basically fucked unless you want to move some distance away.

Please for the love of Christ do not determine your budget from the advice of a fucking realtor.

 

[Squirrel Killer]

And like I said, interest rates blow and the housing economy in my state fucking blows. If we were to get a loan, it would end up costing way more than just saving up and buying it up front in a few years.

No offense, but you have this completely bass ackwards. It's such a perfect storm for a new buyer, that for once realtors aren't lying scumbags when they claim, "Now is the perfect time to buy!" Low interest rates make it cheaper for you to borrow and more "expensive" to save. And in what way does your state's housing economy "blow?" Are prices in the shitter? Then that is also good news for you as a buyer. It sucks for them, but you want the seller to have lost 20-25% on their home's overinflated value. (Now if your market hasn't corrected, waiting might make sense, but even then there might be some bargains out there if you look hard enough.)

 

[Angry Fork]

I don't understand why anyone would want one to begin with unless you're rich. But if not it's just a hell of things you have to fix over time (or in the beginning), ridiculously expensive, tons of paperwork and tax bs, insects you never knew existed showing up, etc. I find it really sad that of all the things people can do in this world buying a home is in their top 3.

And I don't get people who say they want to buy it because it's 'theirs'. If the cons outweigh the pros who cares if it's yours if the investment isn't justified, not only that but it's not really yours until you finish paying off the whopping 10-20 year investment or whatever their mortgage is. I'm not a family type person though and don't ever see myself getting married so maybe that's why I don't understand it.

 

[teh_pwn]

Also, if you buy a home and never sell it, it is an investment because it increases your net worth. Which is part of your estate.

Inflation adjusted house prices historically are flat.

Home ownership is an investment as much as gold as an investment, or bonds. Diversifies you a bit and protects you against inflation, but you're exposed to other sorts of risks.

Personally I view houses as a commodity. You live in them. They don't generate wealth, unless you're renting it out.

I view stocks as real investments because you're owning a piece of a business that generates wealth. Sure you can take losses, but the average real rate of return on stocks is 6% per year for all of history. It's pretty steady if your time horizon is more than 10 years. Bought stocks just before the Great Depression? Cash out in the late 1940s and you get average return. That's worst case.

Please for the love of Christ do not determine your budget from the advice of a fucking realtor.

Seriously. That's like asking a car salesmen for a budget on a luxury car.

 

[gutter_trash]

paying for rent = throwing money away

paying a mortgage = putting it in a bank and gaining value of your home is like interest

I live in Canada, our bubble did not burst like Florida or other parts of the US

Please for the love of Christ do not determine your budget from the advice of a fucking realtor.

oh it's true, you have deregulated your financial institutions in the US and your banks and realtors can lie to you...

 

[GeMiNii]

Really?

I'm 24 with a ~700 credit score, that I expect to be a ~750 within the next year when I pay off my credit cards. I could probably save up like $5K for a downpayment.

Does your example scale? On my salary, living alone, and traveling a lot, I have no need for 2Ksqft. But would you wager I could snag a new, smaller house for say, $750/month? If so, that definitely has me intrigued.

I'm living near Kansas City, where the cost of living isn't absurdly high; aka New York or LA money.

I haven't really looked into a house, as I've always assumed it's out of my reach right now. Which, it still would be at $950/month. But $750/month would be do-able.

At current rates, a $100k mortgage will net around a $650 anywhere in the country including PMI and assuming Property Taxes of 2.5% (make sure these are included in the any total you are quoted by a lender). I'm not familiar with the incentive programs offered at the various levels in KC, but most new home developers will jump through some amazing hoops to get you qualified for whatever is out there. Even if you didn't qualify for anything, the standard FHA loan down payment is 3.5% of the sales price, so 5K is probably more than you'll end up needing.

Also, after your first full year of paying mortgage interest and having your own "home business", (even if it's selling something on eBay once in awhile) will give you a much larger deduction than the standard deduction you are probably taking now, meaning a ton more money in your pocket every time you file your taxes. Even if you end up splurging, your future income growth (hopefully) and insane tax incentives will end up keeping your net house payments fairly low.

As an example, my own mortgage was initially 152k, and over the past four years, between the home buyers tax credit, mortgage interest deduction, and deductions for my business, I've subsidized my house purchase by about 30K through tax savings. My current monthly mortgage amount (after a refi earlier this year) is $950 a month, with an effective payment after tax deductions of around $500 a month. Moral of the story being, even if you think you are overreaching price wise staring at the monthly payment, the tax benefits right now make your effective payment much lower so focus on the perfect home for you and focus a little less on the monthly payment number.

 

[Keyouta]

$600,000 for a decent home here is ridiculous.

 

[WanderingWind]

1) Rent for an apartment where I live is around 1400-2200, depending. Mortgage, with taxes with the VA loan is 1600-1800 for a 3-4 bedroom house. I save money buy buying.

2) Apartments come with a ton of restrictions. A vast, vast majority of places around here won't let you work on a car or own a dog in these apartments. Neighbors on every side of a wall suck after a certain age.

3) I spent 3,000 to close out the house I'm about to buy. Not any of the stupid crazy amounts I'm seeing being thrown around this thread. 'Just save up the 200k and buy it outright!' Yeah, let me go sell my childhood yacht and diamond rattle and I'll get right on that...

 

[Persona7]

Move to a suburb.

Also, Home Owners Associations are fucking bullshit.

 

[teh_pwn]

paying for rent = throwing money away

paying a mortgage = putting it in a bank and gaining value of your home is like interest

I live in Canada, our bubble did not burst like Florida or other parts of the US

Paying for rent is throwing money away? It's providing you shelter. Is buying food throwing your money away if it's not building your own farm?

Houses also have other things that are not principal:
1. Property taxes
2. Extra cost of electricity
3. Extra cost of water
4. Extra cost of commuting
5. Home owner associations and the cost of their bullshit.
6. Lawn care
7. Home repair.
8. Insurance
9. Purchasing fees
10. Selling fees if you move.
11. Mortgage interest
12. Lost future worth of your money because it's going all into the above instead of investments.
13. Your time spent maintaining it

 

[Joates]

Inflation adjusted house prices historically are flat.

Home ownership is an investment as much as gold as an investment, or bonds. Diversifies you a bit and protects you against inflation, but you're exposed to other sorts of risks.

Personally I view houses as a commodity. You live in them. They don't generate wealth, unless you're renting it out.

I view stocks as real investments because you're owning a piece of a business that generates wealth. Sure you can take losses, but the average real rate of return on stocks is 6% per year for all of history. It's pretty steady if your time horizon is more than 10 years. Bought stocks just before the Great Depression? Cash out in the late 1940s and you get average return. That's worst case.




Seriously. That's like asking a car salesmen for a budget on a luxury car.

Where does renting fit into all of that? Can I rent stocks of APPL? The returns would probably be similar to renting an apartment.

PS No one in this thread suggested having a realtor help you determine your budget.

 

[JaseMath]

My wife and I and going through the process of finding a home. Wants vs. Needs...IT'S A FUCKING NIGHTMARE.

 

[Neo Samus]

Grap, got a question for you,

I too live in the N/NW subs, do you live in Cook, Lake, or Kankakee? Reason why I ask is in regard to taxes.

 

[WanderingWind]

Paying for rent is throwing money away? It's providing you shelter. Is buying food throwing your money away if it's not building your own farm?

Mortgages also have other things that are not principal:
1. Property taxes
2. Extra cost of electricity
3. Extra cost of water
4. Extra cost of commuting
5. Home owner associations and the cost of their bullshit.
6. Lawn care
7. Home repair.
8. Insurance
9. Purchasing fees
10. Selling fees if you move.
11. Mortgage interest
12. Lost future worth of your money because it's going all into the above instead of investments.

You pay electricity, water and commute from an apartment, too. Lawn care? The price of a mower isn't exorbitant. Most houses don't have HoAs. Insurance and taxes are all part of the mortgage. Purchasing fees vary from very little to none. Selling fees exist, but if we're counting those, let's factor in first and last month deposits on apartments.

 

[Trent Strong]

I just bought a house with my boyfriend. Buying is definitely doable if you aren't shit with money. I work an average job, I'm not rich by any means, and I still managed to pay off my university debt, buy a nice new car outright, and put a 40k deposit on our home with my own money. So yeah, save like a bitch and you'll eventually be able to buy a house.

Sounds like you are rich.

 

[teh_pwn]

Where does renting fit into all of that? Can I rent stocks of APPL? The returns would probably be similar to renting an apartment.

PS No one in this thread suggested having a realtor help you determine your budget.

AAPL would be a very unwise investment, as would any single company. Diversify in ETFs.

Rent plus power/water/heat/insurance/commute is $850/month for me. A house in TX would be around $1850. That $1000 invested per month compounded 9% per year grows way the fuck faster than a building you're not renting out.

You pay electricity, water and commute from an apartment, too. Lawn care? The price of a mower isn't exorbitant. Most houses don't have HoAs. Insurance and taxes are all part of the mortgage. Purchasing fees vary from very little to none. Selling fees exist, but if we're counting those, let's factor in first and last month deposits on apartments.

Extra cost was written for a reason. Do you know how much money it takes to keep a house in TX cool in the summer? A ton of fucking money.

 

[bwtw]

You pay electricity, water and commute from an apartment, too. Lawn care? The price of a mower isn't exorbitant. Most houses don't have HoAs. Insurance and taxes are all part of the mortgage. Purchasing fees vary from very little to none. Selling fees exist, but if we're counting those, let's factor in first and last month deposits on apartments.

Opportunity cost of lawn care/sorting out other maintenance.

 

[Oracle Dragon]

The gist I get from your post is that people are ignorant on the matter, therefor homes are likely a bad investment.

Well, Ive got news for you, ignorance on any level about any of the investments you make will not turn out well. Not in housing, not in securities.

And dont talk about it not being an investment because they choose not to sell, because they at least can. Renters dont gain equity, its quite simple actually.

No, I never said that at all (at least I don't believe I did). I'm attempting to convey that simply purchasing a property "because it's a good investment" doesn't make it so. But there is a huge I don't know what you would call it, almost a stigma, that renters are fools and everyone should simply be owning a home. So people just do it, because it's expected of them, and feel bad for not owning a home because "it's a good investment", but they don't understand anything else about it. And that's how it can become bad investment.

So yes, I understand that renters are not gaining home equity. I also understand that my use of the word "investment" is not technically correct. I'm using this word only in the context of how most people who don't know what they are getting into understand it: Investment = "I will profit from this", hence our favorite phrase "owning a house is a good investment". Which makes plenty of people feel that they must buy a property, and society seems to place a huge emphasis on home ownership. But there are alternatives, that's all.

 

[WanderingWind]

Extra cost was written for a reason. Do you know how much money it takes to keep a house in TX cool in the summer? A ton of fucking money.

Yes, and no it doesn't. It costs exactly the price of electricity to run central air. You pay electricity in an apartment, too, albeit less. It's not a massive, budget destroying jump. That's sheer, unadulterated hyperbole.

 

[Ether_Snake]

Loans.

I refuse to do loans when it comes to houses though (unless it's in a really small amount). My fiance and I are just saving up until we can pay for most of the house. So far we have approximately $100,000 saved up. In a few more years, we'll move into a nice $200,000+ house that we all paid for in one go. It's going to make life SO much easier.

Yes that's how ideally it should be done. I'm not gonna tell the OP that this is what should be done, because it's not possible for everyone.

Then again, interest rates are low, and they won't rise for years to come because the economy is fucked anyway.

So the biggest determining factor right now should be job security. If you have a secure job, get a loan. But do try to save as much as possible to raise your down-payment to at least 20%,

Edit: Try to keep mortgage expenditure (with insurance, heating, etc.) as no more than 30% of after-tax income. Don't take a 30 year loan, keep it at 25 or lower (unlikely to be able to take one below 25, but don't take a 30 year loan).

What? I don't know anyone who has paid off an entire house in one payment. EVeryone I have ever met got a loan. Hell, I got a loan. It isn't really practical at all to try and pay in all off up front. Where in the hell are you going to live in the meantime?

Getting in debt is just how it is. Whether it is buying a car or buying a house. Those are the only 2 things I owe money on. Everything else I buy is cash money, homie.

The key is to get the loan and pay it off early. Just because the payment expected is "XXXX", doesn;t mean you have to send only "XXXX". Get that crap over with. But unfortunately you may want to get a new house after you pay off that one, starting the cycle all over again.

Errr that's exactly what the guy you are replying to is doing, just faster than you.

Well, yeah, when your advice is to not buy a house unless you can afford to buy it outright. You're basic tenant is that debt is always bad, always. So, your advice is that one should never take on any debt ever. It's logical to assume you're advocating for the destruction of modern finance.

Doubtful, considering he said he has STUDENT LOANS.

I want to buy a house.I pay 375/month rent right now for a cheap-ass small 3-1 house. Our income last year was 53k, we have a 4 yr old boy in private school (200/month), we have a 20k/500 a month loan for the next 4 yrs, probably $3500 in credit card debt and we dont pay no cars or other loans, and the cheapest house we can get here (kinda decent, mind you) is a 170k house which will put us paying at least 900 a month. And we cant afford that... I dont know how some people do it, it baffles my mind. :/

How is a four years old kid in private school? Is he learning algebra or something? I started school at 5. And that was mostly finger-painting on giant sheets of paper and taking naps.

 

[Joates]

AAPL would be a very unwise investment, as would any single company. Diversify in ETFs.

Rent plus power/water/heat/insurance/commute is $850/month for me. A house in TX would be around $1850. That $1000 invested per month compounded 9% per year grows way the fuck faster than a building you're not renting out.



Extra cost was written for a reason. Do you know how much money it takes to keep a house in TX cool in the summer? A ton of fucking money.

Oh diversify in ETFs you say. Well can I rent those?

 

[Joates]

Someone please explain to me how renting is an investment in any sense of the word without factoring in opportunity costs.

 

[Oracle Dragon]

Someone please explain to me how renting is an investment in any sense of the word without factoring in opportunity costs.

I don't think anyone said renting was an investment?

 

[teh_pwn]

Oh diversify in ETFs you say. Well can I rent those?

Stock ETFs are an assortment of stocks, typically that target a specific index of the economy. It's immediate ownership (do you know what stock means?), it's not renting.

 

[Squirrel Killer]

Paying for rent is throwing money away? It's providing you shelter. Is buying food throwing your money away if it's not building your own farm?

Houses also have other things that are not principal:
{snip list}

Obviously, it's a little more complicated than gutter_trash made it out, but after X years, when the renter and the home owner move, the renter has a nice letter of recommendation to help him* secure a new place to live while the home owner has $Y,000 from equity to help him (assuming he didn't buy in an absurdly over-inflated market.)