Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
if you consume the house yourself appreciation is irrelevant . whether the house is 100k or 500k does not matter if you are living in it . when the day comes and you no longer consume it then yes , you sell it and lose the cost cutting ability of that house but you now have the cash .
it is like capital gains on bonds , you need to sell the bonds and no longer get the interest stream in order to realize any capital appreciation , you can not have both . you get to choose one or the other ..
they both may happen at the same time but you can't ever realize the gains without losing the income stream on the bonds or keep the income stream and give up the appreciation ., a house is no different , it is only an expense as long as you live in it . you can't live in it to realize any gains . your heirs can but you can't .
if you consume the house yourself appreciation is irrelevant . whether the house is 100k or 500k does not matter if you are living in it . when the day comes and you no longer consume it then yes , you sell it and lose the cost cutting ability of that house but you now have the cash .
.
No it is relevant to the discussion. When I sell I get rid of the housing expense AND I get all the money I paid during ownership PLUS a handsome amount for appreciation. If you rent you got butkiss.
they both may happen at the same time but you can't ever realize the gains without losing the income stream on the bonds or keep the income stream and give up the appreciation ., a house is no different , it is only an expense as long as you live in it . you can't live in it to realize any gains . your heirs can but you can't .
OK, but a bond offers NO utility so there is no comparison. Also I can access my appreciation by a cash out refi. I just traded a small monthly payment for close to $400,000 in cash for my appreciation. And I still get the utility of the property and it is still earning appreciation!
Go to your bank and show them you receipts for rental expense and ask how much you can borrow on them.
A refi is an expense. You will pay more for the money then you get . Don't even try to think you are correct.
You get to live in the house or sell it for the gains , not both .
If it is a rental it is not your residence you live in.
It's just a small additional expense that is still less than renting and will be reimbursed by my appreciation gains. I'm being PAID to live in the property. Try doing that with a rental. I can continue to keep my "housing" expense less than renting and pull out hundreds of thousands of dollars of appreciation every few years. And If I ever decide I want to be a renter for what ever reason I can sell and pay off the bank with the appreciated value and KEEP all the hundreds of thousands of dollars.
it only has to do with the fact you do not get the appreciation while you consume the house .
you just put the equity in the home up as collateral and took a loan , the same as any other loan . . except if you do not pay they take the house .
it isn't like the bank bought your living room so you sold off some of the equity in the house and pocketed it and owe nothing . .. nope , the equity stays trapped in the house and you took a loan out .
in fact it is no different then if you had a relationship with the bank and they agreed to give you a loan for the same amount without putting the house up for collateral .
the houses value still has the equity trapped in it until you sell , you can only borrow money which has to go back in addition to having the appreciation sit in the house not instead of the appreciation sitting in the house .
Last edited by mathjak107; 10-03-2015 at 05:48 PM..
You seem to not account for the $400,000 in my pocket. Who would rather have $400,000 in 2015 cash vs less than $1500 a month for the next 30 years? Again, how do you do this in your rental?
if you had a 400,000 dollar house that was paid for that you lived in , what you would have if you refinanced :
is still a 400,000 dollar house that is paid for plus a separate 400,000 dollar loan you took out and a 400,000 dollar liability on the loan . the house is not a factor other then you qualified to take a loan based on it .
all that happens is if you don't pay they take the house instead .
nothing changed as far as the house , you just borrowed another 400k and owe 400k plus interest .
if you had a 400,000 house that was paid for that you lived in , what you would have if you refinanced :
is still a 400,000 dollar house that is paid for plus a 400,000 dollar loan and a 400,000 dollar liablility on the loan . the house is not a factor other then you qualified to take a loan based on it .
all that happens is if you don't pay they take the house instead .
nothing changed as far as the house , you just borrowed another 400k and owe 400k plus interest .
it is simple .
NO, the $400,000 is the appreciation that the house earned for me while I'm living in it! If I just borrow against what I paid for the house all I am doing is just putting my own cash back into the house. You might want to educate yourself on appreciation.
it does not play out any other way from what i stated . you still can't get to the appreciation in the house until it is sold . the 400k sits trapped in the house , you borrowed an additional 400k and you owe 400k plus interest .
the house's value only allowed you to qualify for another loan .
forget arguing it , if you could qualify on your own for the 400k you wouldn't even need the house . the houses value only helps you qualify .
you took a loan out is what you did , plain and simple , other than qualifying you for a loan that the house is out of the equation .
House or no house you just borrowed 400k and owe it back.
Last edited by mathjak107; 10-03-2015 at 06:30 PM..
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
