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Let me guess...you told the salesman you only wanted to pay $200 a month and he said something like "We can make that work." There you go! You bought a payment, not a car.
He bought a payment and got a free car thrown in. Is that what you're saying?
Mortgages are a rip-off. Study your amortization chart and see what you end up paying for the house. Add in increased property taxes, repair, upgrades, remodels, maintenance. No thanks.
Mortgages are a rip-off. Study your amortization chart and see what you end up paying for the house. Add in increased property taxes, repair, upgrades, remodels, maintenance. No thanks.
Lol.
By the time you save $150k to buy a house, the house will be worth $300k and your $150k will have diminished in value due to inflation. The property tax and interest rate is tax deductible so you’re paying more money in taxes than homeowners are, so thank you.
Upgrading and remodels are optional.
Rent will always go up, while a mortgage is a hedge against inflation.
I have a 2006 Hyundai Tucson, bought it used with 70K for around $6700.
Financed it thru my credit union who ive been with for over 10 yrs.
Payments are $210 a month for 5 years, and when I paid it off, I will have paid $12,600, so the credit union is basically doubling their money!?
I noticed the same thing years ago when I was married and bought a house, the house was listed for $120K, our monthly payment for 30 yrs was around $850. If we made all the payments, we would have paid $306,000! That means our real interest rate was over 100%...right?
It’s unlikely you actually financed $6700.
Most likely you added taxes and dealer fees, and got talked into extended warranties and $500 wheel locks and $400 nitrogen fills. All that extra junk adds up.
This generalization is oversold to people as well. Buying a house often isn’t a great investment, it’s often a huge expense, liability that appreciates around the rate of inflation with the exception of some hot markets. The tax benefits have deminshed some and if you have to sell in the first 1-5 years it’s probably going to turn out to be a poor experience. That also doesn’t take into account the fact that most people buy more and nicer than they rent which actually throws off any comparisons anyhow
Even if a house appreciates zero, it’s still an asset you’ll have when you’re old. You can sell it and use the money for a retirement home, get a reverse mortgage for income, or leave it to your heirs. If you rent all of your life you’ll have nothing in the end.
Lol.
By the time you save $150k to buy a house, the house will be worth $300k and your $150k will have diminished in value due to inflation. The property tax and interest rate is tax deductible so you’re paying more money in taxes than homeowners are, so thank you.
Upgrading and remodels are optional.
Rent will always go up, while a mortgage is a hedge against inflation.
Stock market is often better. Instead of leaving your savings in the bank, invest instead. The $150k in your example might well grow to more than $300k. Historically, houses only keep up with inflation, while stocks do better. Of course the house has an added benefit of saving on rent, but this benefit is often overstated because even a free and clear owner has to pay for upkeep, insurance, taxes, repairs, and remodelling. Other costs that may apply to some owners are HOA dues, landscaping, and lost wages if the owner takes off work to meet a repair technician or does other work him- or her- self.
The "average" person will not have that kind of cash anyway, unless we are talking $2500 or something.
Seriously???? I could have paid for the OP's car out of my savings account. I could have paid for my own recently purchased car, too, if I didn't mind almost wiping out the balance. I still paid for my new car in cash, because my father agreed to cash in part of my future inheritance to pay for it.
Even if a house appreciates zero, it’s still an asset you’ll have when you’re old. You can sell it and use the money for a retirement home, get a reverse mortgage for income, or leave it to your heirs. If you rent all of your life you’ll have nothing in the end.
You are assuming the renter blows all their excess money on fast cars, bars, and trips to Vegas and never invests what can be saved by renting cheaply.
Lol.
By the time you save $150k to buy a house, the house will be worth $300k and your $150k will have diminished in value due to inflation. The property tax and interest rate is tax deductible so you’re paying more money in taxes than homeowners are, so thank you.
Upgrading and remodels are optional.
Rent will always go up, while a mortgage is a hedge against inflation.
Your tax side advice is out of date. Nearly half of mortgage holders do not itemize and therefore get zero tax incentive from owning. That was before the changes to the 2018 tax law which will drive that number much higher now that the standard deduction is moving and property tax deductibility is now limited to 10k a year
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