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Att'n Home owners! Is it worth it?

Discussion in 'Anything goes' started by SoSueMe, Apr 20, 2007.

  1. Gold

    Gold Active Member

    It's usually worth it if you can afford the monthly payments.

    In the first place, you will get some of the money back because you will be paying less in taxes.

    In the second place, you probably won't be living in the place for 40 years, 30 years, or even 10 years. If the property goes up in value, you have equity and you have an investment. Instead of just paying rent and not having anything to show for it, you build equity.

    Example: If you buy a $150,000 house and put 20 percent ($30,000 down) and the value of the house increases by 6 percent each year, at the end of five years, your house is worth $195,000 and you have equity of your original $30,000 down plus the additional $45,000 in value. Tax rules are very favorable on this gain. Also, if it is a fixed rate, the house payment will stay steady... property taxes and insurance will increase, but the payment is fixed.

    The only way it doesn't make sense is if you don't plan to move in the next two years.

    The biggest mistake most homebuyers make is that they pay too much for their first home. Try to talk to other people and get a good idea about prices.

    The idea of that sort of committment can be scary, but it shouldn't be as scary as paying rent for the rest of your life.

    Edit: didn't know So Sue Me was a Canadian. In that case, scratch the part about the tax advantage.
  2. slappy4428

    slappy4428 Active Member

    Of course... you have accidents covered on your homeowners, right?
  3. BTExpress

    BTExpress Well-Known Member

    Is it worth it?

    In 54 months my mortgage will be paid off.

    I think I can get used to never having to write another $1,000+ housing check for the rest of my life.

    Especially with the newspaper industry in the shape it's in.

    But a 40-year mortgage? At these low rates? Never.

    15. And not a year more.

    You'll hate it at first.

    You'll learn to regard it as the best decision you ever made.
  4. KJIM

    KJIM Well-Known Member

    Or worst.

    I'm currently trying to get mine ready to sell because I'll be fleeing the country. IF I can sell it, I will be lucky. There are 300 empty houses in my little 2-square-mile suburb of Big City. Half of the 25 homes on my spot of the map that have changed hands in the last five years (since I bought mine) have been foreclosures.

    If I can walk away only losing $20k or so, I will be far luckier than most in my metro area.

    If you plan to live in a house for a good long time, maybe it's a good idea to buy. But home ownership is not for everyone, nor is it the almost-guaranteed investment it once was.
  5. Idaho

    Idaho Active Member

    Almost always worth it. And the 40-year thing only matters if you plan on staying there for 40 years. If you think you might move in 5-10 years and home values have been going up, it's a good deal though you won't be building a lot of equity at first.

    Our house now has 13 years left on the mortgage and a 4.875 rate. We bought it almost two years ago for $230,000. The house directly across the street with less square feet, fewer bedrooms and a smaller yard sold two months ago for $375,000 so we think we are really lucky.

    But it can not be said too often, do not buy the max you can get a bank to give you. You might be able to 'afford' that payment, but won't it be nice to also put a couch and kitchen table in the place?
  6. SoSueMe

    SoSueMe Active Member

    My only argument here is this: As my house increases in value, so does everyone else's. So, while my house increased by, say 6 per cent per year, so did the guy who owns the house I want buy after I sell mine.
  7. slappy4428

    slappy4428 Active Member

    This sidewalk isn't going to fix itself and the beer isn't going to get any colder... let's go
  8. Idaho

    Idaho Active Member

    And when you sell the house you bought for $200,000 for a price of $300,000 in a few years (cross your fingers) you'll have $100,000 for a down payment on the $350,000 upgrade home. Eventually, you own the home outright and have no mortgage payments to worry about.

    As a renter, you might want to buy the $350,000 home in a few years but won't have the $100,000 to use. But you will have paid rent for those years but be no closer to owning a house.

    If owning a house is not a priority to you, building equity is still a good idea.
  9. BTExpress

    BTExpress Well-Known Member

    That's true.

    But if I sold my house today I could buy one twice as big in my home state and still have $100,000 left over.

    And if, say, you're a 60something homeowner looking to supplement your income in retirement --- and you don't plan to will the house to the kids --- you can take out a reverse mortgage and have the bank pay you $1,000 or more every month until you and your spouse die.

    If you're a 60something and still renting . . . God help you.
  10. Inky_Wretch

    Inky_Wretch Well-Known Member

    Damn it man, I have to go to the hardware store to buy a new concrete trowel, line level, some twine, tomato stakes and a new speed square.
  11. Deskhack

    Deskhack Member

    That's nice and all, but living in a market where only crackhouses cost less than $250,000, and being single (no one to share payments), it ain't that easy. Seven years ago, houses in my area averaged about 150,000 -- good houses. I really feel like I missed my opportunity.
  12. EStreetJoe

    EStreetJoe Well-Known Member

    That equity can come in handy if you want to make a major purchase as you can borrow at a lower rate and have the interest be tax-deductable.
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