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Old 12-09-2017, 08:41 PM
 
Location: Queens, New Yawk
8,359 posts, read 4,357,343 times
Reputation: 13207

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Quote:
Originally Posted by eliza61nyc View Post
lol

I think people who are homeowners conveniently block this out. I own my home and it is a HUGE drain on finances even without a mortgage. and the older the house gets, the more maintenance it will need. I have a HOA also that goes up annually.

So you need to look at a lot more than the cost of a mortgage. Now I live in the northeast so with this new tax plan, I'm taking a huge hit because my real estate taxes will only be deductible up to a certain point so the tax incentive for ownership is going away.

I also don't understand how people say their mortgage does not go up. My mortgage payment includes my escrow account which is property taxes and home owners insurance. believe me op, my mortgage most definitely has gone up. my property taxes have gone up annually as well as my homeowners insurance.

this most likely will be the last house I ever own. It's not conducive to aging in it as it has 4 floors. when I sell this puppy I may, may get a condo but since I want to be a snowbird, I'll probably get a small condo for Philly and rent for the winter in the south.

I hope to never own again.
Thatís where weíre at. Property taxes alone are what make owning so much more than expensive than renting in our area. If that tax bill goes through, that makes it all the more expensive. The only reason we are/weíre considering buying is because we need more space, but is it worth it if property taxes are higher than our mortgage from the get-go? Iím not so sure anymore.
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Old 12-10-2017, 07:22 PM
 
4,816 posts, read 5,172,140 times
Reputation: 6929
Quote:
Originally Posted by LifeIsGood01 View Post
Every time you pay your mortgage you are contributing to your net worth. Every time you pay your rent, you are contributing to your landlordís net worth. Currently a homeowners net worth is 35 times higher than a renter and increasing fast.
If youíre buying as an income property? Yes. If youíre buying to live in? Not so sure.
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Old 12-10-2017, 07:26 PM
 
Location: Texas
41,672 posts, read 47,510,225 times
Reputation: 65281
Quote:
Originally Posted by Pilot1 View Post
This is why I got a 15 year mortgage instead of a 30 year, and the monthly payment wasn't THAT much more. The interest savings were considerable.
Yup. This.
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Old 12-10-2017, 07:26 PM
Status: "Keep your friends close and your enemies closer" (set 19 days ago)
 
Location: North Beach, MD on the Chesapeake
30,262 posts, read 36,648,772 times
Reputation: 37497
Quote:
Originally Posted by louie0406 View Post
If youíre buying as an income property? Yes. If youíre buying to live in? Not so sure.
Not so sure about what?

https://www.forbes.com/sites/lawrenc.../#21f3f0141e4b

https://www.mykcm.com/2017/10/12/net...-than-renters/
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Old 12-14-2017, 08:17 AM
 
Location: Gilbert, Arizona
2,476 posts, read 803,150 times
Reputation: 1368
Quote:
Originally Posted by louie0406 View Post
Mortgage payments are fixed, but property tax and home owners insurance aren’t.

A good friend of mine who purchased a home in my area said that he’s had 3 property tax hikes in the 3yrs that he’s been there. According to him, they weren’t small hikes either. He’s paying a significant amount more now than he was 3yrs ago.
I read a few of the earlier posts and I'm also in the same mindset as you but I'm in my late 20's wanting to purchase property. But seeing the interest rack up scares me.

The only reason I see why homeownership is great is in terms of owning property outright. Sure, property taxes, maintenance, insurance will always be there regardless of where you go (either you rent and have it baked into your rent or you pay for it as a homeowner). But the big difference is when you own a home, you own an asset that once it's paid off, your cost of living reduces drastically. Plus you have the freedom to do as you wish to your home if you decide to paint, remodel, whatever, you're free to do so.

If you add up the cost of taxes, maintenance, and insurance (with a reasonable amount of buffer room for maintenance), you'd save at the very minimum 70-80% of your total cost of housing per month. So basically, you can work a minimum wage job and not lose your home. Whereas if you rent, that most likely won't work.
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Old 12-14-2017, 08:26 AM
 
Location: Gilbert, Arizona
2,476 posts, read 803,150 times
Reputation: 1368
Quote:
Originally Posted by louie0406 View Post
If youíre buying as an income property? Yes. If youíre buying to live in? Not so sure.
He means that because the home you live in is an asset that belongs to you. Sure your primary home shouldn't be considered an investment imo since you need to live somewhere, but many think otherwise. But regardless, it's still part of your net worth.
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Old 12-14-2017, 08:30 AM
 
7,911 posts, read 5,053,370 times
Reputation: 8336
Quote:
Originally Posted by man4857 View Post
He means that because the home you live in is an asset that belongs to you. Sure your primary home shouldn't be considered an investment imo since you need to live somewhere, but many think otherwise. But regardless, it's still part of your net worth.
It is an asset because it can double in value and you can sell and buy a home with your profit in a lower cost area or downsize in your area.
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Old 12-16-2017, 04:59 AM
 
5,390 posts, read 6,859,401 times
Reputation: 2977
Quote:
Originally Posted by louie0406 View Post
My wife and I have been flirting with the idea of purchasing our first home. Both of us are in our late 30’s and have no children, nor do we plan to. We are currently renting in a wonderful gated community in Florida’s gulf coast. We pay $1100/month for a 2br, 2bath, 1200sq ft apt. Amenities include 2 swimming pools, jacuzzi, dog park, fitness center, car garage, and storage room. We can easily afford the rent as we split everything 50/50 and are able to save/invest excess cash.

We’ve been doing some mortgage interest calculations, and it turns out that on a 250k home, we will pay over $100k in interest at 3.75% over 30yr years. Call me crazy, but I just cannot justify that. Is there something that I’m just not understanding? On top of that, you’re on the hook for taxes, insurance and basic maintenance and repairs of your home.

The only benefit that I can see from owning a home is that you have more private space and nobody can evict you (unless you stop mortgage or tax payments). Other than that, I dont see the upside.

I see the argument all the time of how “you’re just throwing money away by renting as you build no equity and are just lining someone else’s pockets”. Well aren’t you lining the pocket of these banks buy paying an exhorbanant amount of interest over the years?

Why shouldn’t I just keep my $50k (20%) down payment in the bank and continue to save and invest while paying an affordable rent instead of locking myself into a long term loan paying an insane amount of interest?

Again, we are new too all of this and are just looking for some information on how buying a home rather than continuing to rent would be financially beneficial to us because I dont see it.

Thanks...
If you don’t want to pay interest, buy a house/condo in cash. Yes you’d still have taxes and insurance, but as mentioned when you’re renting you’re still paying that just for someone else.

How much would a comparable condo to your apartment cost? Depending on taxes/insurance/HOA, I’d guess an $1100 payment would require a loan in the neighborhood of $150k. Can you get much for $150k in your area? If so, and it sounds like you already have $50k saved, you might be able to keep saving and buy in cash later.

The cost of maintenance is definitely a good argument against home ownership. But if you’re good with a condo, that would likely require less maintenance (but would most likely have a higher HOA fee).
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Old 12-19-2017, 04:40 PM
 
Location: NYC
10,919 posts, read 6,850,305 times
Reputation: 11626
Renting and owning with a mortgage isn't that much different. You don't own anything really. If you rent a house you have rules to follow, as opposed to owning you have more freedom. The only benefit is owning can be an investment and your costs can be recuperated if the home value appreciates.
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Old 12-20-2017, 09:00 AM
 
4,269 posts, read 11,147,611 times
Reputation: 2580
Quote:
Originally Posted by vision33r View Post
Renting and owning with a mortgage isn't that much different. You don't own anything really. If you rent a house you have rules to follow, as opposed to owning you have more freedom. The only benefit is owning can be an investment and your costs can be recuperated if the home value appreciates.
"you don't really own anything" when you buy a house???
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