Owning a house.

UIowaHottie · #1 05-27-2007, 01:29 AM

I'm watching TLC about couples buying houses and living together. It seems to me the thought of buying a house is worthless for the fact that the bank owns it and you're going to end up paying 3x the price if you dont just pay up front. Your thoughts?

captZEEbo · #2 05-27-2007, 02:09 AM

Your house appreciates in value too. It works out that if you get a good mortgage rate, it is in your BEST INTEREST to NOT pay it off right away even if you can. You can simply pay the mortgage and invest the money you would have used to pay off the house in the stock market and get better returns then just buying the house outright.

jthegreat · #3 05-27-2007, 09:20 AM

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It seems to me the thought of buying a house is worthless for the fact that the bank owns it and you're going to end up paying 3x the price if you dont just pay up front. Your thoughts?

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The interest you pay is kinda like rent. And it's tax deductible. Unless your interest rate is huge, it works out much cheaper than renting, and that doesn't take appreciation into account.

Roan · #4 05-27-2007, 10:29 AM

[ QUOTE ]
I'm watching TLC about couples buying houses and living together. It seems to me the thought of buying a house is worthless for the fact that the bank owns it and you're going to end up paying 3x the price if you dont just pay up front. Your thoughts?

[/ QUOTE ]

This post kinda makes my head hurt, not trying to be a dick, but i'm also not really sure to begin....

My guess is that anyone who is having their story put onto TLC probably has some get rich quick/flip plan for their house and stands a decent chance of getting in over their head.

But for the millions of Mom/Dad/2.4 Kids/Dog families out there buying a house and living in it for 20-40 years is probably the best investment that any of them will ever make.

Long term, what is the alternative to a mortgage?

Ken_AA · #5 05-28-2007, 12:23 AM

My wife and I bought a 89K town house ( no kids, small dog and I loooooove not having to mow the lawn myself) less then 2 miles from the apartment we were living in. Our interest rate is 6.5%. We have only paid off about 1.4K of the principal so far, but our monthly payment is only $756 a month ( not paying more on it each month as we have some other debt at higher interest rates that we are paying off).

When we left our apartment the rent was going up to 800 a month, and is now at 850. The house is also much nicer.

The house was an excellent investment.

Ken

TheMetetron · #6 05-28-2007, 03:57 AM

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Long term, what is the alternative to a mortgage?

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Renting.

Which I love oh so much more. The thought of never owning a house makes me giddy.

TheMetetron · #7 05-28-2007, 03:57 AM

Ken,

How much are property taxes, maintenance costs, and homeowners' fees?

Pokeraddict · #8 05-28-2007, 02:53 PM

[ QUOTE ]
Ken,

How much are property taxes, maintenance costs, and homeowners' fees?

[/ QUOTE ]

Also the "You can deduct your mortgage" is overrated. You already get a standard deduction of $10,300. Unless you are carrying a large note or donate lots of money to charity then it is not the steal you think it is. The appreciation should be the real reason. If you think you will be moving in the next 2 years don't waste your time.

There is a great feeling in having your oen home but you have to be ready to settle down or it is not going to work out as well as you hoped.

maxtower · #9 05-28-2007, 03:07 PM

Ken,
Your situation seems good. However in many parts of the country is not possible to buy a place anywhere near that cheap. Condos near where I live in Tempe are going for $250k+.
ugh...
I don't think I'll ever own a place around here.

jaydub · #10 05-28-2007, 03:38 PM

[ QUOTE ]
[ QUOTE ]
Ken,

How much are property taxes, maintenance costs, and homeowners' fees?

[/ QUOTE ]

Also the "You can deduct your mortgage" is overrated. You already get a standard deduction of $10,300. Unless you are carrying a large note or donate lots of money to charity then it is not the steal you think it is. The appreciation should be the real reason. If you think you will be moving in the next 2 years don't waste your time.

There is a great feeling in having your oen home but you have to be ready to settle down or it is not going to work out as well as you hoped.

[/ QUOTE ]

PA,

The standard deduction issue you raise is rarely an issue with families. Also, the MI deduction is one of the few which can still be taken under AMT. This is critical for high income families.

I agree with the rest of what you said. Buying a house recently was made too easy, taken too lightly by purchasers, used as an ATM by suckers who live beyond their means, and used as a get rich scheme by fliptards.

J