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You want to buy a house that is $100k and want to borrow the money from me. I am only willing to lend 80% of the value because house value's go up and down. There is also wear and tear issues that could develop. If you don't have the initiative or ability to save $20k - 20% and have no money on the table, why should I take a risk with you?
Don't forget, you are "asking" them to lend you money, they are NOT obligated to give it to you unless you can prove you have the ability to pay it back. Being able to pay 20% says a lot about you and how they view you as a risk.
Thanlk you for adding to the ever growing list of reasons why there should be more 'small home' oprions so that people can buy what they can afford without having to go around asking others to lemd them money.
"did you think landlord capital comes out of thin air?"
As a matter of fact, it does. You buy a duplex and the bank writes a check to the seller. You live in the duplex and your renter pays you rent which you use to make your duplex payment. The check written to the seller did come out of thin air wit permission of some federal agency whether it is the VA, Rural Development, FHA or some other guarantor. Now you can buy up to a four unit with an FHA loan as long as you live in one of the units. They call it a "quadplex".
Is this a great country or what? Where do I sign up for this?
I think I have your answer. Post incessantly on city data complaining about everything you can think of. Wait, that's what you do now! The enviable life of many of us. If only we had all that free time!!
Become an online seller and you can have free time too. Websites work 24/7.
i would think if someone is going to devote their time to on line selling that they are in decent financial shape and don't have to go out and get a 2nd job with a guaranteed pay check because their main job pays them so little . .
i know i used to deal in high end stereo equipment , but i wouldn't ever think of doing it until i had enough income coming in from my jobs .
The mortgage interest deduction benefits higher earners disproportionately, if you aren't aware of this you haven't looked into the topic much
Disproportionately, yes, but like my grandmother often said, "too good is no good" and as incomes rise above a point, the deduction (like some other itemized deductions) is phased out.
As originally designed, the deduction's benefits flow overwhelmingly to the highest-income taxpayers. The phaseout is just one of the tweaks Congress later added in order to soak the rich with stealth taxation, which is a disingenuous way to tax.
Better to have higher transparent tax rates than to raise revenue by phasing out deductions with a lower opaque rate.
Disproportionately, yes, but like my grandmother often said, "too good is no good" and as incomes rise above a point, the deduction (like some other itemized deductions) is phased out.
As originally designed, the deduction's benefits flow overwhelmingly to the highest-income taxpayers. The phaseout is just one of the tweaks Congress later added in order to soak the rich with stealth taxation, which is a disingenuous way to tax.
Better to have higher transparent tax rates than to raise revenue by phasing out deductions with a lower opaque rate.
You can argue better ways to tax but the truth of the matter is most of the benefit of the mortgage interest deduction goes to higher earners. Effective tax rates are what matters not marginal rates however most people don't understand the system enough to get into effective rates
Well you don't need 20% as a down payment but the number is largely subjective. American lenders seem to feel that's a pain point of defaulting on a mortgage. If you have little to no equity it's easier to walk away and the more equity you have the harder it is to do.
As one who has paid more to rent a room than my next door neighbor paid to own a house, why would a homeowner walk away from a mortgage which is cheaper than rent?
Would I rather have a little equity - and a locked-in P&I payment - than zero equity and rising rent?
Back in 2011, if you have an adjusted gross income of over $166,800, your mortgage interest starts to get phased out. For every $100 of income over $166,800 you lose $3 of itemized deduction X 33.3% up to a maximum loss of 80 percent of your itemized deductions. Talk about another overly complicated rule the IRS/government has implemented.
Example: You make $266,800 and you have $50,000 in mortgage interest deductions. Take $266,800 – $166,800 = $100,000. Then take $100,000 X 3% = $3,000. Finally, take $3,000 X 33.3% = $999. You can now only deduct $49,001 ($50,000 – $999) from your income instead of originally $50,000.
Phase out is an attempt to put lipstick on a pig; however underneath that maquillage it still is a PIG.
Regardless of how Congress attempts to gloss over things the fact remains home mortgage interest deduction is one of the most costly in the US tax code. That and it only benefits a very small subset of ratepayers and causes distortions in the housing market. Canada, GB and many other countries have no such deduction and yet their homeownership rates are about the same or a bit more than ours.
You could get rid of the HMID and outside of a select demographic in specific local areas few if any others would notice or even care. There are many reasons for this but primary among them is vast numbers of average Americans take the standard deduction rather than itemize. Once you do that the HMID is useless.
As one who has paid more to rent a room than my next door neighbor paid to own a house, why would a homeowner walk away from a mortgage which is cheaper than rent?
Would I rather have a little equity - and a locked-in P&I payment - than zero equity and rising rent?
um, duh.
Owning isn't always cheaper and if your mortgage was 300k but your house was worth only 200k. You also might not be able to make the mortgage payments for various reasons. You are smart enough to understand this
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