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Most people rely on others to tell them how much they can afford??? That is certainly not my reality.
Maybe in (your intended, and arguably, required) context of 'most people are stupid about money'.
It's not my personal reality as in my personal finance but it is most often the case with average joes
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Isn't your second sentence basically a red herring though?
It's not a red herring it was my original point. If you don't know exactly how much a home purchase impacts your federal income tax you can't possibly know the net cost buying and paying for the house. I said most people wouldn't know their net costs and Pub-911 said I would be wrong by a lot. I don't buy that for a second
Most people submit their assets and income statements to get prequalified and they get a letter stating how much of a mortgage they will be allowed to take.
I don't have numbers but I'm guessing the majority buy close to that price point.
Even if they don't buy near or up to the max most let someone else tell them what that is. Additionally most people do not calculate what the housing cost would be after federal income tax consideration for the mortgage interest and property tax possible deductions
I just read that the MID costs the US government $70 billion in 2013. This is something that should be reconsidered. Something could be set up for first-time home buyers up to a certain amount of money and left at that.
We have a lot of things to pay for in the USA and no one wants to shell out. Our politicians have borrowed from everywhere it can, including countries like China. The interest on our national debt as of April, 2017 is $266 billion. Something has to give somewhere, folks.
I said most people wouldn't know their net costs and Pub-911 said I would be wrong by a lot. I don't buy that for a second
There's a lot you haven't purchased that you should have. People do not buy houses the way a kid who just got his allowance carries on in a penny-candy store. For first-time home buyers, it's a daunting process at best, not something that they will have breezed through cavalierly. Experienced homeowners trading up or down or doing a refi will of course know exactly what numbers they need to look at and what calculations they need to run. Excel (or an equivalent) is after all found on just about everybody's desktop.
I just read that the MID costs the US government $70 billion in 2013. This is something that should be reconsidered. Something could be set up for first-time home buyers up to a certain amount of money and left at that. We have a lot of things to pay for in the USA and no one wants to shell out. Our politicians have borrowed from everywhere it can, including countries like China. The interest on our national debt as of April, 2017 is $266 billion. Something has to give somewhere, folks.
On paper, the deductibility of real estate taxes increases that cost by close to 50%. But relax -- the real world is a lot less like something dreamed up by Maurice Sendak than you may have thought.
There's a lot you haven't purchased that you should have.
What on earth are you talking about?
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People do not buy houses the way a kid who just got his allowance carries on in a penny-candy store.
Never did I suggest as such so I'm not sure what your nonsense reply is about
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For first-time home buyers, it's a daunting process at best, not something that they will have breezed through cavalierly.
It is and typcially first time homebuyers rely heavily on other people to guide them through the numbers as do a lot of buyers who have purchased multiple houses
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Experienced homeowners trading up or down or doing a refi will of course know exactly what numbers they need to look at and what calculations they need to run. Excel (or an equivalent) is after all found on just about everybody's desktop.
What basis do you have to believe experienced homebuyers know the exact numbers and calculations hey need to run? I'm not sure why you believe most people could functionally calculate their home buying costs and the net cost after impact to federal income taxes. Again what basis do you have for this claim? Next you are going to tell me that most people read all the real estate and closing documents fully and understand them before signing
Why would someone NEED to consider their net housing costs by including the deductions? I would rather look at the MID as a bonus rather than a way to consider cost for the home.
For example, when I calculate my take home pay, I think of it as take home AFTER 401k/health insurance deductions.
While I know what the cost are, I wouldn't factor it into my take home pay.
Similarly, I'm not going to think of my housing cost and then say "its even less because of the MID".
About three-quarters of the returns taking the mortgage deduction are making 100K a year. Based on the homes affordable for the level of income, properties around 300K and above will probably be affected. The deduction starts phasing out at much higher income levels. My guess is that homes between 300K and 1M would be directly affected.
Why would someone NEED to consider their net housing costs by including the deductions? I would rather look at the MID as a bonus rather than a way to consider cost for the home.
For example, when I calculate my take home pay, I think of it as take home AFTER 401k/health insurance deductions.
While I know what the cost are, I wouldn't factor it into my take home pay.
Similarly, I'm not going to think of my housing cost and then say "its even less because of the MID".
Why wouldn't we factor it in? For some of us, it means a nice chunk of change on our tax return. It is definitely factored into my budget.
About three-quarters of the returns taking the mortgage deduction are making 100K a year. Based on the homes affordable for the level of income, properties around 300K and above will probably be affected. The deduction starts phasing out at much higher income levels. My guess is that homes between 300K and 1M would be directly affected.
Your guess would be wrong. My mortgage is under 200K and I take the deduction.
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