Are you okay with renting or do you get sad about it sometimes? (ARM, fee)
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in our case we can afford to buy where we live , we just have no interest in owning anymore and haven't for the last 18 years . our investments easily cover the rent while still growing nicely and at this point we are retired . we have no ownership headaches and really living where we do is transparent to us as we basically sleep here and enjoy traveling .
renting gave us the ability to invest in far more lucrative investments rather then have a few hundred thousand tied up in the house. like i said the investments produced enough to buy 2 homes today even after subtracting out rent and taxes ,.
so renting is a mixed bag . you have very poor and very rich and everything in between . there is nothing inherently about renting that limits your wealth if you have the resources to choose .
in fact i know quite a few retirees who ended up house rich and cash poor . now without loans they can't get a penny out of that house as long as they consume it . yes , reverse mortgages are loans . they are balloon payments due when you no longer meet the terms . you or your heirs can just give them the house to pay the loans off.
so the best they can do is use the house as collateral for loans .
so doing well is all about resources and choices .
Last edited by mathjak107; 12-04-2018 at 08:28 AM..
This thread caught my eye because I felt very sad--and like a loser--for many years because I was a renter until I was 52 years old. I lived in the NYC metro area (northern NJ) in a town where most people do own nice homes. By my early 40s, I realized that my alkie/gambler spouse was never going to be OK, that there would never be a house for us (or any more children than the one I had) and that I had to give up those dreams and concentrate on raising my daughter and getting her through college. I rented a house that was probably really beyond my budget, but I needed to stay in the safe, nice suburban town where my mother lived and provide a stable life for my daughter while I schlepped off to the city every day to make a living.
Then, near the time when she was about to graduate from high school, I found myself in a position at work where I held knowledge that had mostly left with the drove of retirees who were walking out the door, and I got several promotions in several years, which boosted my income to the point where I might actually be able to pay a mortgage, even though it had not been possible for me to ever save for a down payment.
The Obama administration came out with the first-time home buyers tax credit, I was eligible for an FHA mortgage that required only 3.5% down, and I was able to borrow that from my state retirement fund. Boom, I moved to a slightly less expensive area of the state and got myself a small condo, which is all I needed at that stage in the game. Nine years later, I've long paid off that borrowed down payment as well as other debt accumulated from raising my daughter, and earlier this year I paid off what I'd borrowed to get her through college. All I've got left is a mortgage that's still far less expensive than the rent I used to pay on the house when my daughter was in high school.
So for those of you who want something of your own who think your age and circumstances will prevent you from ever owning, don't give up the dream. Keep yourself open to opportunity, and it just may come.
Incidentally, searching in the area where I now live is how I found City-Data in the first place. When I bought my condo, I happily posted the information on the forum just to have some sub-moronic killjoy inform me that I really don't own anything, since it's only a condo. Well, honey, there are big differences. I can have my pets, I can paint the walls the colors I want, I don't have to go without heat for three weeks because the landlord is vacationing in Europe and can't be reached forcing me to run out and buy space heaters. Paying maintenance fees means that when it snows somebody else is out there shoveling the walks and my front porch and plowing the parking lot and doing the landscaping in summer, all of which I was responsible for doing when I was renting.
I wish the best to anyone else on here who still holds on to their desire to have a place of their own someday even if life has given you a few hard kicks in the shins. Good luck.
"3.5% down, and I was able to borrow that from my state retirement fund"
I'm glad it worked out for you, but this is a recipe for disaster. Borrowing to get the down payment on a house you can't afford is setting yourself up for trouble, fast. Although I strongly recommend buying over renting, it needs to be done the right way. Again, it worked for you, which is awesome, but I hope others don't take this and run with it because it is not giving someone the best chances of financial strength long-term.
From what I have seen, condos are on a par with apartment living, except you have expenses. In my area, the fees run about $ 300.00 (for a condo price of roughly $ 120.00). There are often special assessments even in complexes with fairly healthy reserves. I also have 3 pets, none of whom I will give up. It might be okay if they were money makers, but I think unless you are living in a very high market area like NY or San Fran, they don't have much resale value.
"3.5% down, and I was able to borrow that from my state retirement fund"
I'm glad it worked out for you, but this is a recipe for disaster. Borrowing to get the down payment on a house you can't afford is setting yourself up for trouble, fast. Although I strongly recommend buying over renting, it needs to be done the right way. Again, it worked for you, which is awesome, but I hope others don't take this and run with it because it is not giving someone the best chances of financial strength long-term.
I think it just depends on several factors. I agree no one should take on a mortgage they can't afford, but to "borrow" in order to get started on something that can get you out of the rent trap is probably a good idea. Not sure about condos - I live in hurricane alley so I am biased in what I have seen in terms of assessments, insurance, etc.
I recommend buying if you can squeak by and get a mortgage and find something affordable. At the end of the day, you'll own something. With renting, after years and years of payments, you'll have nothing to show for it.
The reason I bought, even thought I had to move 2 hours to a cheaper cost of living area of Florida was because my mortgage payment is less than what rent would cost, a lot less, I could rent my home for twice my mortgage payment, or I could rent out a spare bedroom and it would cover the mortgage plus the electric and water the roommate would use.
But I got lucky and got in back in early 2016 just before prices shot up for starter homes in this area.
Buying a house is the best thing i ever did, I only wish I had bought a few decades ago instead.
Last edited by LifeIsGood01; 12-06-2018 at 07:40 PM..
The reason I bought, even thought I had to move 2 hours to a cheaper cost of living area of Florida was because my mortgage payment is less than what rent would cost, a lot less, I could rent my home for twice my mortgage payment, or I could rent out a spare bedroom and it would cover the mortgage plus the electric and water the roommate would use.
But I got lucky and got in back in early 2016 just before prices shot up for starter homes in this area.
Almost same thing with me! My landlady wanted to raise my rent by $400 a month and I had already had it with the place and her refusals to do any repairs. Bought a small house 40 miles away and my mortgage is half of rent. Plus I now have a garage, driveway, basement and a yard...all things I didn't have before in my 350 sq ft apartment.
I think it just depends on several factors. I agree no one should take on a mortgage they can't afford, but to "borrow" in order to get started on something that can get you out of the rent trap is probably a good idea. Not sure about condos - I live in hurricane alley so I am biased in what I have seen in terms of assessments, insurance, etc.
I don't agree. Having a mortgage (at least the right type of mortgage) isn't the problem. It's borrowing from yourself just to come up with such a small down payment on the wrong type of mortgage. If this is what it takes to buy something, you aren't ready, you can't afford it yet. If it was that hard to get to that point, that person doesn't stand a chance when life happens and they have to fix the roof, HVAC, or even just replace the refrigerator. That person needs to hunker down, rent cheaply, focus on improving their finances, save up an emergency fund, save up a proper down payment, and then worry about buying reasonably.
i like renting - when something goes wrong - i call the landlord/maintenance and they do all the work.
I like living in a building where i dont have to live on the 1st floor. if you have a home, you live on the first floor and maybe have bedrooms on 2nd floor, but if you live in a ranch home, you are always on the 1st floor.
I cannot see myself living in 1 place for 20-30 years when you have a mortgage. Things might change where i cant live in the same place and selling a house is harder to get out of.
I do not want to spend my time and money on lawn care, fixing the roof, having to spend my money on a new furnace, etc.
I do not want to spend my time and money on lawn care, fixing the roof, having to spend my money on a new furnace, etc.
I don't want to spend my time and money paying for the landlords lawn care, fixing the roof, or having to spend money on a new furnace for where I am renting.
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