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Seller financing... or they were renters and landlord sold to them with seller financing...
It happened to a hair dresser I know... she had lived in the same little home for 17 years... the widow owner approached her and said she was going to sell... the hair dresser said it has been home for so long... short story is she bought it and is making payments to the seller who is now in a retirement home.
In my opinion, you should only buy a house if you can afford to lose that money. Otherwise, it is for the most part a waste. If it is an investment, then you should look at it as such, and have enough money to be fine if the investment goes bust. Look at almost any property - once you buy the house, it starts for the most part losing value. Over perhaps 20 years (and with the economy and unstable job market, most people don't stay in houses anywhere near that long these days), the value of the house stays almost the same. You can't count on it to grow, especially with all the maintenance costs and possible problems with it as well as wear and tear over the years and style changes. Flipping houses, especially if you live in them is a viable option if you can make sure you don't push the value too far past what the neighboring homes are estimated at, but that is a lot of time and work, and also a gamble.
In addition, look at the debt the average American family is in on top of that. If you do follow the recommendations and go to a four-year college, that is a HUGE amount of debt that you will be paying off usually into your 30s (much worse if you go to grad school). Add to that the mortgage debt, as well as other expenses like car loans and insurances. It would often make more sense to be a mechanic, plumber, or manager of a profitable construction company and start making and saving money for retirement at age 20. In truth, they are more likely to be able to buy a smaller home and make that financially viable, though likely they would do better in retirement if they rented long-term, deferring mortgage payments, repair costs, and other costs/risks associated with home ownership.
I just think that the numbers don't make sense for the majority of people, especially when much of the generations under 50 don't know how or are unwilling to budget and save for retirement.
There are two components to the price - the building, and the land.
The building, in the absence of improvements or renovations, is (in inflation adjusted terms at least) a depreciating asset on average.
The land, on the other hand, is typically not, but with large variation from one place to another.
I know In my situation, I didn't wake up and look at my bank account and decide to buy a house. It was a long-term plan that took many years to actually play out. I probably started plotting about 10 years ago, and made some financial investments and moves with a plan in mind to one day use such funds to buy a house.
Things like having no debt, building up a credit score, reducing my expenses overall as well as a few investments that frankly, I got very lucky on all had to line up well for me to be able to finally reach a goal I wanted for a long time.
I have had friends/family ask me how I was able to afford buying a home. Truth was it was a bit of work.
Yep, this. My husband and I have friends who are practically given houses or have them mostly paid for by their parents. I won't lie, it makes us a little jealous because we started from nothing and are busting our asses saving up to buy what will be a much more modest house than what they were simply given.
When my now-husband and I were dating, he would give me mini-lectures on financial prudence. I had just bought a condo and the mortgage was eating 65% of my take-home pay.
So I was over at his house one day while he was opening his mail. One item was a card from his mother with a check inside for a mid-five-figure amount. My jaw dropped. I said, "You're lecturing me and your MOTHER sends you money?!?" At least he had the grace to look embarrassed.
I know In my situation, I didn't wake up and look at my bank account and decide to buy a house. It was a long-term plan that took many years to actually play out. I probably started plotting about 10 years ago, and made some financial investments and moves with a plan in mind to one day use such funds to buy a house.
This is not what most people do. Many, MANY people see their tax refund in February/March and say, "What do I do with this $3,000 (arbitrary number) I just received? I hate paying so much in rent, let's see if we can buy a house." They make a call, and move forward from there.
Or, they are presented with renewing their lease and see the increase and don't want to continue paying that much in rent when they could possibly own a house for the same mortgage payment.
The vast majority of people don't "plan for years." Many move up buyers have a "final straw" moment in their home like holiday cooking and get mad they don't have a double oven, or not enough rooms for their guests, and decide to sell and buy something new on an emotional frustration basis.
I have friends who can barely fill their gas tank buy a home. We both have steady income and 18K down, and with down payment, closing costs, moving expenses etc....we could be out almost all of our money. How do people with no many afford it?
I don't know. I had savings. Not a ton, but enough to cover the downpayment. I negotiated to get seller assistance for a portion of the closing costs. My salary covers the mortgage and other expenses. If you focus on buying a house that you can comfortably afford on your salary, it shouldn't be that hard.
A lot of it has to do with where one lives. And lots of people get the down payment from parents/relatives, etc. They have financial help.
I've never understood this. When I bought a house I had to prove that I had SAVED the downpayment and that there weren't any huge deposits in the last number of months - not sure what the period was. So it was kind of like the reverse of a Medicaid look-back period. How do these "kids" get away with a big chunk of money from their parents?
I've never understood this. When I bought a house I had to prove that I had SAVED the downpayment and that there weren't any huge deposits in the last number of months - not sure what the period was. So it was kind of like the reverse of a Medicaid look-back period. How do these "kids" get away with a big chunk of money from their parents?
It's called a gift, and with proper documentation, entirely legal.
I don't have kuds, but uf I did, I'd sure as hell rather give them money for the down payment on a house than spend it on a big wedding,
When my now-husband and I were dating, he would give me mini-lectures on financial prudence. I had just bought a condo and the mortgage was eating 65% of my take-home pay.
So I was over at his house one day while he was opening his mail. One item was a card from his mother with a check inside for a mid-five-figure amount. My jaw dropped. I said, "You're lecturing me and your MOTHER sends you money?!?" At least he had the grace to look embarrassed.
First step of financial prudence is to be born in the right family, everyone knows that
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