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I grew up in an ethnic area of New York where people claimed their origin from the wave of European Immigrants at the end of the 19th and the beginning of the 20th Century. These people all paid their mortgages first and deferred luxuries. There were no boats, second cars. They kept old furniture and many did not have pets. People did not eat out; the neighborhood smelled of sausage, pasta and cabbage. They paid cash for everything and accumulated no debt. There were no second mortgages---they prided themselves on paying their mortgage quickly. When they did buy a house, they had a large down payment or paid cash for the house. Yes, when these people retired they proudly owned their own modest homes. I still see that in many of the smarter immigrants from Asia who understand thrift.
That was the environment that taught me a very good lesson. I got suddenly sick in my forties and became disabled. Lost my job. What saved me was the lesson I learned--I had always practiced frugality because I never made much money. Lost my job when I was just starting to get some little savings.
I had a mortgage and no second. I had a car loan but no other debt. I paid off my house and I paid off my car. Now, 15 years latter, I live just on Social Security and I have absolutely no debt.
I have a car that is 15 years old with 70,000 miles. I am now have to put repairs in my house and the recent repair of $3,600 I charged to my visa and paid it all off when it became due. Yes, I use a credit card for convenience and emergency but I have never paid interest on a credit card. To borrow money with a credit card is idiotic when you can get better terms from a direct bank loan or better yet---do without and have no debt.
I live so frugally that I save a little money even on Social Security. I have not been to a movie in 7 years. I have not eaten in a restaurant in about 2 years. I have no cable or satellite TV. This internet connection is my only luxury but if times get tougher--I can do without.
I do agree with Carmac that the cashing out to get equity on your home is a very bad idea. If you use it to buy a car, a vacation, new furniture---it is stupid. Many new homeowners want everything now and cannot wait and they accumulated debt just with all the junk they think they need--they really do not.
It makes me angry when I read these stories about these spoiled Americans who lost their house and are making big salaries. You see pictures of there home and they got pool tables, fancy furniture, snow mobiles, boats and multiple pets. Of course, they want a bailout, a mortgage reduction--but it does not work because it is their lifestyle that is the problem. Very few lost their homes because of dire emergencies--those should get help.
I had no bailout. I get very little help because even though my Social Security is at poverty level--I have just enough savings to make me ineligible. I will not change that fact and spend down just to qualify for help----because it is wrong. Yet that is the advice I get--buy more, buy a new car, remodel your house; and then you can get more government help---all BS.
Perhaps you may decide to buy a home when you are older but how much house do you need??? A small home, a small condo can fit all your needs and desires---just learn to live with less. I do not think I would buy more home than I could pay cash, at a latter age in life. You can use those interest payments to have a better experience in life without putting all the money into a house.
I am free from the desires to compete, to put on a show for other and to live beyond my limited means. It is so good to know that I can live even on less. I just laugh at all these fools and I
Livecontent
Last edited by livecontent; 08-06-2009 at 06:25 PM..
Interesting and I guess I'm just not smart according to the previous posts but its my choice, my life and only person having a hardship at some point might be me!
I bought a small Cape Cod house, 900+ sq. ft., two years ago when I turned 60. I wanted to get out of NE Illinois, live near Lake Michigan and found I could afford a home in NE Wisconsin. I was living in a senior mobile home park, loved it but the surrounding area got to be scarey, a shooting sent me over the edge.
I looked at it as my retirement place, it was 1,100 sq. ft., 2 baths, yard on 4 sides with 2 car carport. While my friends were living in condos/apartments, I did the mobile home thing because I wanted to travel. I was fortunate to have 5 wks vacation/15 paid holidays while I worked for VW. In the 80's, 90's and 2000's I was on the go to many places plus 20+ cruises (not just caribbean, boring!).
Now I have a mortgage payment, lower than rents because I put 33% down on my house and did remortgage to get the rate 1.5% less. For me, living close to Lake Michigan, being able to walk for groceries, nice neighborhood, sidewalks, tree lined streets a town of 12,000 is awesome. When you live in a mobile park, you pay lot rent but still the utilities on your unit. In Illinois there is a yearly mobile tax but no real estate tax. In comparison, I'm not paying much more to be here and I have safety, peace and quiet, can go out of my house for a walk in the dark, listen to the lake roar.
The initial post asks when is too old to buy, ideally most people have their house paid then decide if they want to stay there, sell and gear down, have 2 places, whatever. However, every situation is different and being very independent, never married, worked at one place 33+ years, changing my initial plans didn't really concern me, especially when safety, quality of life was involved. I can make mortgage payments plus I have a perpetual car payment to VW for a car plan, its just the way it is, my choice. Sorry for the long story but who is anyone to say having a mortgage is wrong?
Last edited by susancruzs; 08-06-2009 at 06:44 PM..
Reason: addition
Thwer is nothing worng with buying ;if you can affrorsd it. in afct most that rent do not want to manage the place they live because the taqxes and the mainteance is paid fopr by their rent plus profit for the owner. The only way around this is if you are subsidezed by taxepayers. But not many want to live in the section 8 rentals and pay for it really. Others can affors to reant a nice house ;don't want the hassel of manging it ;so that is personal choice really. it all comes down to waht you can afford and want.If you can affords to buy it really doesn't matter your age really.Its all circumstance really; which many younger people are now finding they really couldn't afford to buy the home they did.
we will own half a house when we retire in about 1-1/2 years.... we rent in queens ny right now and bought a retirement home in northeast pa...our plan is to live there may thru november, give up the nyc apartment and rent somewhere different every year for the winter ....
our investment income more then pays the rent anywhere we go and can do so for ever.... the important thing when you retire is that whatever you invest in should pay the bills...
if you rent and dont buy a home and instead buy other asset classes your entire life , thats fine.. if you buy a home then you wont have rent but you may not have as much other assets... other assets may grow at 6 or 7 % easily beating out the average 3% rent increases with plenty to spare.....its all a means to the same end and one way isnt better then another.... it all boils down to affording your retirement lifestyle.
some people need the comfort of having their home costs fixed although with the jump in taxes in lots areas thats far from true ... others like the growth rate on other assets instead and dont mind using some of that growth to pay their rent... your arguing about something that there is no answere too... the homeowner may have a home, the renter may have a million plus bucks to generate income, our home we bought in 1987 was 169,000, which we since sold is worth 400,000 today , the same 169,000 in the portfolio i have been using for over 20 years is 1.8 million.... i could theoretically subtract out all the rent i would have paid all those years and had enough left today to buy 2 homes had i done that instead........ no difference folks its all a means to the same ending... how you pay to live dosnt really matter only that income covers your lifestyle
Last edited by mathjak107; 08-07-2009 at 04:12 AM..
think about the renter who bought a rental property instead of his own home....if the property throws off enough income to not only pay his rent year after year but gives him somewhat of an Income too from whats left over.... is he at a disadvantge to a homeowner? of course not.......
he may even be ahead but for all purposes, it matters not how the end is achieved....
think about the retirement grave yard which is filled with failed retirements of people who were house rich and cash poor and under estimated how much money other then the house they would need.... and while they can reverse mortgage it when they bump the credit limit the house has no equity left and the payments stop ..
its all a means to the same end ..SUPPORT OUR RETIREMENT AND LIVING COSTS .....there is no way thats better then the other..... theres only bad planning in both cases , whether you own your home or not it really dosnt matter
Last edited by mathjak107; 08-07-2009 at 06:15 AM..
Interesting and I guess I'm just not smart according to the previous posts but its my choice, my life and only person having a hardship at some point might be me!
I bought a small Cape Cod house, 900+ sq. ft., two years ago when I turned 60. I wanted to get out of NE Illinois, live near Lake Michigan and found I could afford a home in NE Wisconsin. I was living in a senior mobile home park, loved it but the surrounding area got to be scarey, a shooting sent me over the edge.
I looked at it as my retirement place, it was 1,100 sq. ft., 2 baths, yard on 4 sides with 2 car carport. While my friends were living in condos/apartments, I did the mobile home thing because I wanted to travel. I was fortunate to have 5 wks vacation/15 paid holidays while I worked for VW. In the 80's, 90's and 2000's I was on the go to many places plus 20+ cruises (not just caribbean, boring!).
Now I have a mortgage payment, lower than rents because I put 33% down on my house and did remortgage to get the rate 1.5% less. For me, living close to Lake Michigan, being able to walk for groceries, nice neighborhood, sidewalks, tree lined streets a town of 12,000 is awesome. When you live in a mobile park, you pay lot rent but still the utilities on your unit. In Illinois there is a yearly mobile tax but no real estate tax. In comparison, I'm not paying much more to be here and I have safety, peace and quiet, can go out of my house for a walk in the dark, listen to the lake roar.
The initial post asks when is too old to buy, ideally most people have their house paid then decide if they want to stay there, sell and gear down, have 2 places, whatever. However, every situation is different and being very independent, never married, worked at one place 33+ years, changing my initial plans didn't really concern me, especially when safety, quality of life was involved. I can make mortgage payments plus I have a perpetual car payment to VW for a car plan, its just the way it is, my choice. Sorry for the long story but who is anyone to say having a mortgage is wrong?
i see your friends with some of my nepa forum friends like summering. as you saw from some of the postings it really dosnt matter either way , whether you have a mortgage or not. it all boils down to having investments and resources that can cover your lifestyle and thats the bottom line. have a house, have mortgage, rent , it matters not, its all your lifestyle choice once you can afford the payments.
all i know is i saw about 7 grand go out this month for our nepa home as since we bought in july 2 years ago everything comes due in august... our taxes, our fuel purchase, maintaince by the bug guy, the gutter cleaner, a repair on a pipe ,insurance etc i dont even have a mortgage or am living their yet ha ha ha
Last edited by mathjak107; 08-12-2009 at 03:50 AM..
I recently turned 54 years old and am currently renting. I had a house for 10 years that I sold 3 years ago. It bothers me to keep throwing money away on rent, but I work in an insecure industry and am afraid to buy another house with the possibility of losing my career job of 20 years. I am single with no kids and no debt and am mobile if needed be. What are my best options on a residence for now and the future?
I recently turned 54 years old and am currently renting. I had a house for 10 years that I sold 3 years ago. It bothers me to keep throwing money away on rent, but I work in an insecure industry and am afraid to buy another house with the possibility of losing my career job of 20 years. I am single with no kids and no debt and am mobile if needed be. What are my best options on a residence for now and the future?
I am in agreement with those who stated that your financial situation is the basis for a decision to rent vs. buy. Even if you can get the mortgage payment lower than the rent; you will still have maintenance costs; all of the utilities to pay; taxes/insurance; and in many cases there is also an HOA fee. The only item that does not change is the mortgage (if you have a fixed loan).
You're not 'throwing money away' when you rent since it is providing you a place to live, no property taxes, no home owners insurance cost, no maintenance, and in most cases the LL will pay for many of the utilities.
If you were to lose your current job; would you be able to secure another job with comparable pay? Would your present employer provide a severance package and/or a pension? Do you have sufficient funds in savings/investment to tide you over until you were able to find another job?
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