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I think that's pretty typical. And probably none of you are walking way with enough funds to buy a home outright.
Since only 64% of Americans own (1/3 of those are mortgage free) as opposed to rent and among seniors who own homes 40% are carrying mortgage debt, there aren't many who will inherit homes free and clear.
I didn't realize so many seniors rent. Times are changing.
It's frequently not a matter of settling. I'd love to own the small 3 bedroom 1.5 bath house my grandparents owned. But, I can't because it's current value is 1.3 million dollars. When they died, the house was inherited by their 5 kids and had to be sold because no one could afford to keep it. Some homes owned by parents or grandparents appreciate to the point where they are unaffordable for later generations. The cost of maintaining an old home is impossible for some as are taxes in some areas.
Originally Posted by honobob The better question is why would anyone with any financial aptitude want to have equity sitting in a highly illiquid asset when the government has provided a highly advantaged process of having your cake and eating.
Quote:
Originally Posted by ncole1
We've been over this already and it's beside the point in many (most?) cases where the option doesn't exist to own a home outright because the net worth isn't high enough.
Try this:
Build a house.
15 year mortgage.
Rent it out.
15 years later the tenants will have paid off the mortgage, so your investment is zero.
But now you own the house.
Move in.
So, now our person with a low paying job (but good credit) has figured out a way to own a home outright without earning enough money to pay for it.
We actually did that with 2 town houses. We didn't move in, though. We have been taking money out of those properties for about 15 years (they are 30 years old) and will continue for another 20 years.
Try this:
Build a house.
15 year mortgage.
Rent it out.
15 years later the tenants will have paid off the mortgage, so your investment is zero.
But now you own the house.
Move in.
So, now our person with a low paying job (but good credit) has figured out a way to own a home outright without earning enough money to pay for it.
We actually did that with 2 town houses. We didn't move in, though. We have been taking money out of those properties for about 15 years (they are 30 years old) and will continue for another 20 years.
Houses haven't gone up in "value". A place to live in 50 years ago is still a place to live in today. A dollar has become worth less over time. Hopefully we can get some leadership in the White House and Congress before it becomes worthless.
Most 3BR homes today will be more energy efficient, roomier, and have far more features than one 50 years ago. It has more value.
If someone has a net worth of $200, they aren't going to be in a position to own a home outright (except perhaps in Detroit? or with massive student loans from med school?)
Home equity is not counted as part of a person's net worth.
Heck be nice if they will build a home for everybody family their is, but we all know that wont happen. I see so many homes that are boarded up, broken down due to neglect.. Why not just let a person come in and fix it and live in it rent/mortgage free. After all the county/state not making any money on it when its just sitting their. We have a housing problem, and no family should be renting from the MAN because of the RED tape and other obstruction to prevent a person getting a home.
What does having 6 years of taxes, 2 years of paystubs have to do with buying a home, and have a decent rate of 500 a month.. Honestly, if i had a house payment for 500 a month, i would not leave for nothing, and will it to the kids..
Because squatters don't fix a house, they just trash it. If they can't pay rent, what makes you think they can foot the bill for home improvements? "Fixing it up" requires resources, skill and craftsmanship, which few people have any more. If you want to own a house, buy it. There are a lot of broken down, uninhabitable houses in this country that you can have for a song.
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