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I wish I could go back 6 months. I was overly enthusiastic about paying down my newly acquired 15 year 2.49% mortgage that I put a ‘spare’ $70k towards it in the first month.
In hindsight, not only would I NOT put that extra payment in, I would have opted for the 2.89% 30 year mortgage option.
I thought I was doing myself a favor by getting the lowest rate and short term… but the tiny variation in rate between the 2 options now seems laughable, and my payment could be $500 or more less per month if it was 30-year
Why??
The stock market is absolute garbage right now. There's nothing better to put your money into than paying off your house
Well, maybe yes, but maybe no. It all depends on personal circumstances...
There's a zero percent bracket for long-term capital gains that applies to stocks. Someone who is living on only Social Security and their stocks will likely make good use of this bracket. Some states tax capital gains, but others do not.
True, but I don't know anyone whose entire retirement income is solely made up of Social Security and capital gains. I would think that someone who had a lot of capital gains also has quite a bit of retirement income in addition to Social Seucrity; e.g., pensions, tIRAs, and/or 401(k)s.
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Originally Posted by hikernut
Also, stocks can be put into a Roth account, but a personal residence cannot.
Of course not. Why would there be any reason to given that up to half a million dollars in net profit is completely tax free? And if you've done it twice, that would be $1,000,000 tax free.
The avg person renting a house same size as mine will pay much much higher overall costs in terms of rental payment vs my 2K mortgage over the next 26 years. That's an absolute guarantee. Don't forget my house will likely be worth 1m+ at the end of 30 years. The renter will have nothing
Generally more people buy more house than whatever space they rent. More square feet, more bathrooms, nice finishes, better schools etc. I’d say it would be in a small number of cases where you bought and rented the same thing
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You can argue about my maintenance and repairs and the rising taxes but it's not gonna be even half the difference of my mortgage vs rent scenario or the monster equity I will have at the end
Because of the above it doesn’t need to be
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The people who try to justify the rent always use some tiny place vs a big house. That's not a legitimate comparison. You have to compare apples to apples.
Or you should just do more accurate comparisons, comparing apples to apples on this topic does make as much sense
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If you are OK with a tiny place, you can buy and own a little apartment and it will be cost controlled without rising rents for the next 20 years and still be a much better financial move
What if you get limited to join appreciation and have to sell within 1-3 years?
Generally more people buy more house than whatever space they rent. More square feet, more bathrooms, nice finishes, better schools etc. I’d say it would be in a small number of cases where you bought and rented the same thing
Because of the above it doesn’t need to be
Or you should just do more accurate comparisons, comparing apples to apples on this topic does make as
Comparing my 3000 sqr foot place to 800 sqrt foot apartment is not an accurate comparison though
I enjoy my house 10 times more than I would enjoy an 800 sqr foot apartment
The stock market is absolute garbage right now. There's nothing better to put your money into than paying off your house
Are you struggling with expenses?
Paying down your mortgage or hers only saves you 2% and change per year. You have a 30 year projection on the value of your house why not the stock market?
Also your house will appreciate/depreciate at the same rate mortgage or not
Comparing my 3000 sqr foot place to 800 sqrt foot apartment is not an accurate comparison though
I enjoy my house 10 times more than I would enjoy an 800 sqr foot apartment
I have a 2900 sqft house now and if I moved and decided to rent 800 sqft would work just fine. While it may not be a good comparison for you comparing a 3k sqft apartment to a 3k sqft house most often isn’t realistic
I've seen a few threads on different forums with people trying to claim that renting is better financially long term than owning
Are those same people finally ready to admit that they made a disastrous choice? If you have not yet purchased a home, you're either going to continue to pay ridiculously high + climbing rent or you will be forced to overpay on a house by 150K and get a 6% interest rate instead of a 3% interest rate you could have gotten if you pulled the trigger 3 years ago
I seriously feel bad for lifelong renters. Most of them are now in a situation where it's borderline impossible to ever become financially independent (assuming they don't make a huge income)
People make choices. Not everybody that rents made a mistake, just like not everybody who bought did the right thing. Just like voting! Sometimes you vote for the right party, other times you don't. People getting freebies will continue to vote for more freebies. And the rest of us will foot the bill.
You're in the 1% of people who live in rent stabilized apartments
The avg renter is getting raked over the coals right now
And you need a big place if you plan to have multiple kids and dogs. I plan to have 2 3 kids and I have 2 big pitbulls. I can't put this all into a 800 sqr foot dump
800 sq foot homes would be a luxury for millions of folks. Calling it a dump is not a good look.
Of course, I recognize that couples with families want a home for their children.
I've purchased 4 homes in my life and lived paycheck to paycheck as a slave for the banks. It was hard to get a good night's sleep. I couldn't even afford to take a vacation. Now, I am a pensioner with regrets and low income. It wasn't just the cost of a home there was a health issue too.
To me, in my own perception, buying homes is not what it is cracked up to be. Maybe in the 80s it was less expensive and made more sense than buying one today. The white picket fence of the 50s isn't here anymore so aspiring to the mindset of those times doesn't apply in today's world, in my opinion.
People are encouraged to buy homes, believing that renting is just throwing their money away instead of investing it into a house. When in fact, it cost me 60% less a year to rent a nice spacious apartment and have the landlord pay for repairs and appliances etc. All I had to do was buy furniture and turn on the utilities. Hindsight 20/20.
I agree with everything you said,I could use the time to find a part time job,pursue my real interest(not mowning lawn or learn to build a Koi pond) or just be a lazy couch potato.
Instead of spending time at Home Depot getting insecticide,caulking knife,water hose,fertiliser,I could be wining and dining at a private club,drinking champagne and tasting caviar.
so now you are a pensioner,living in a rental apt ,what happens to the sales proceeds of your house,did you not make a killing from the sale?
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