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Old 07-18-2017, 06:05 PM
 
Location: Ruidoso, NM
5,170 posts, read 4,733,092 times
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Quote:
Originally Posted by Larry Caldwell View Post
At current rates, a 15 year, $250,000 mortgage will cost you about $90,000. The same rate on a 30 year mortgage will cost you about $200,000. A 15 year mortgage really does save you a lot of money.
You have to calculate present value for this to make any sense. Plus you need to factor in educated guesses on the rate of return on the monthly savings if you do 30 vs 15.

I went with 15 years because the rate was almost 1% less. But even then if you are hot investor, sticking your savings into another investment may be better.
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Old 07-18-2017, 06:25 PM
 
Location: City of the Angels
2,223 posts, read 1,522,921 times
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Follow the money !




NAR: Foreign investment surges 49% – hits record high


Foreign sales rise in top five countries
Buyers from China exceeded all countries by dollar volume of sales at $31.7 billion, which was up from last year's survey ($27.3 billion) and topped 2015 ($28.6 billion) as the new survey high. Chinese buyers also purchased the most housing units for the third consecutive year (40,572; up from 29,195 in 2016).


NAR: Foreign investment surges 49%
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Old 07-18-2017, 07:51 PM
 
25,817 posts, read 49,712,454 times
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Quote:
Originally Posted by rruff View Post
You have to calculate present value for this to make any sense. Plus you need to factor in educated guesses on the rate of return on the monthly savings if you do 30 vs 15.

I went with 15 years because the rate was almost 1% less. But even then if you are hot investor, sticking your savings into another investment may be better.
My best return by far has been Real Estate.

Being from peasant stock where owning land is everything I always added extra principal each month to the 30 to pay off in 15... had a 15 that I paid for 12 years and the lender offered a discount if I paid off the balance and I did.

Current mortgage is 2.75 Fixed 15 year with no points or fees... boy do I love my credit union!

If reducing debt provides a person with peace of mind why not? In my case it was an incentive to work harder and divert the extra money to principal...

My other investments have never done anywhere near as well...
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Old 07-18-2017, 09:54 PM
 
Location: Ruidoso, NM
5,170 posts, read 4,733,092 times
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Quote:
Originally Posted by Ultrarunner View Post
My best return by far has been Real Estate.
In that case you might have done better with 30 years mortgages on rental properties.
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Old 07-18-2017, 09:59 PM
 
Location: Ruidoso, NM
5,170 posts, read 4,733,092 times
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Quote:
Originally Posted by NickofDiamonds View Post
NAR: Foreign investment surges 49% hits record high
Yep, selling off our country. That's what trade deficits do for us. We get depressed wages and when the US$ come back we get inflated RE.
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Old 07-18-2017, 10:22 PM
 
Location: Myrtle Creek, Oregon
11,048 posts, read 11,460,740 times
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Quote:
Originally Posted by MrRational View Post
That's a different statement than the Q of affordability ...as in monthly bills.

But even if our prospective homebuyer did have the extra $300 a month the 15year deal requires...
he likely has a lot of other good solid uses for that cold hard cash. Some, like retirement investing, likely a better use.
---

The only solid way to 'save money' is to buy the house for the $130,000 it's worth
rather than signing on for the $250,000 price that the market has forced him into...
even if he can afford the $250,000 deal.
You believe in the tooth fairy too, don't you? If financial responsibility is not forced, John Q. will just **** it away. If he or she has money in hand, it will get spent. Welcome to the consumer society. If you don't like $250,000 homes, buy one for $130,000. Nobody is forcing you go upscale but your own cupidity.
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Old 07-18-2017, 10:26 PM
 
Location: Myrtle Creek, Oregon
11,048 posts, read 11,460,740 times
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Quote:
Originally Posted by rruff View Post
You have to calculate present value for this to make any sense. Plus you need to factor in educated guesses on the rate of return on the monthly savings if you do 30 vs 15.

I went with 15 years because the rate was almost 1% less. But even then if you are hot investor, sticking your savings into another investment may be better.
I went with a 15 year, and after the home was paid off just continued to make the mortgage payments into savings. That gave me $24,000 a year to invest, which was very nice when the recession rolled around. Buy low.
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Old 07-19-2017, 06:15 AM
 
4,229 posts, read 1,905,340 times
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Quote:
Originally Posted by Larry Caldwell View Post
A 15 year mortgage really does save you a lot of money.
Current dollars and future dollars are not worth the same thing. With a 15-year note, you pay more per month over a shorter period of time as compared to a 30-year note. It is not certain that this front-loading of outlays will be to a borrower's advantage.

Considering that the typical lifespan of a mortgage is well less than 10 years, it might be that simple cash-flow would be the appropriate measure to look at in any case.

Last edited by Pub-911; 07-19-2017 at 06:30 AM..
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Old 07-19-2017, 06:35 AM
 
4,229 posts, read 1,905,340 times
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Quote:
Originally Posted by GregW View Post
a major problem with building new housing is the wages of most of the potential buyers is numerically the same as 40 years ago. the same job does not give the worker the same buying power. If we continue this way it never will.
How many people are actually working in the same job they were working in 40 years ago?

Quote:
Originally Posted by GregW View Post
We have been thinking of selling our condo and taking the money and running to a much less crowed place like the Rio Grande Valley south of Albuquerque.
A common strategy. It works out well for some and not for others. Often it depends on one's affinity for what are sometimes called "amenities." Shopping, dining, cultural and recreational opportunities, a competent medical community. That sort of thing.
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Old 07-19-2017, 06:49 AM
 
3,966 posts, read 1,593,575 times
Reputation: 12400
Quote:
Originally Posted by inquisitive2 View Post
IMO: High cost f housing and rents a result of supply and demand due to manipulation by banks and government. Do you agree or disagree- and why?
It's a lot more complex than that.

At the height of the housing boom, I consulted for twenty different real estate developments, ranging in size from 30 homes to 2,000. In 2006, when the FHA yanked the rug on jumbo loans over $300,000, I immediately began counseling my clients to quit building. But developers are not exactly long-term thinkers. Only one of them trimmed his sails, and he's the only one still in business today.

While the revision of lending requirements was justified, Dodd Frank swung the pendulum too far in the other direction, choking off commercial lending to almost all large clients. Case in point? My wife is CFO for a large commercial real estate firm with a sterling credit record, and even they were having to jump through unbelievable hoops to get financing, forcing them to pay down loans according to the arbitrary whims of Federal bank regulators. So you can imagine how hard it was for your garden variety contractor to get financing for his 20-home development, no matter how good the demographics looked. Keep that in mind when you read a column by a financial writer wondering aloud how come historically-low interest rates did not juice the economy. A low interest rate does no good if the bank won't actually lend you the money.

The upshot? With unbelievably restrictive lending requirements and most contractors prostrate, it became much harder to build.
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