Save Almost Everything, Spend Virtually Nothing
November 5th, 2018 at 12:40:12 PM permalink | |
petroglyph Member since: Aug 3, 2014 Threads: 25 Posts: 6227 | I paid off my house one month before I turned 30, [which was my second house]. Poured it all into a nice log home on ten acres, [which needed finishing]. The X got it. I won't live long enough to pay off this one, no way. I was a little surprised a bank loaned me the money to get this one? We didn't want to rent, so put down a few thousand dollars to be able to decide what colors we want on the walls. Didn't think property would escalate as fast as it has. Right now I'm sure we could sell this house for at least 30% more than the purchase price. This is how I look at it, and these numbers are hypothetical. Purchase price 300k, down payment and closing equal 10k. Sell house ten years later for 400k. Payments of 1k monthly includes everything, insurance etc. How would you consider the profit? If you pay 300k at closing total, sell for 400k, thats about 1/3 profit. But if a person finances and puts down say, 10k, and sells for the same price, is that not multiples of the down payment percentage wise? One hundred thousand profit on the total value of the home, with only putting down 10k, is ten times what the original equity is, isn't it, if the payments are looked at the same as rent, and the interest which is the bulk of the payment [rent] is deducted from taxes? Loosely, that is my thinking. I think of paying off a home at this time, as "stranded capital". I feel more secure having a sack of cash than another deed, especially after sacrificing plenty of property in the past. The last official act of any government is to loot the treasury. GW |
November 5th, 2018 at 1:24:43 PM permalink | |
Evenbob Member since: Oct 24, 2012 Threads: 146 Posts: 25011 |
If you think all of those combined even approach the cost of a mortgage payment, you've never paid off a mortgage. People have parties when they pay it off, for a reason. The proverbial stone has been lifted off your chest. If you take a risk, you may lose. If you never take a risk, you will always lose. |
November 5th, 2018 at 1:58:45 PM permalink | |
JimRockford Member since: Sep 18, 2015 Threads: 2 Posts: 971 | My property tax alone exceeds my mortgage payments by 35%. The mind hungers for that on which it feeds. |
November 5th, 2018 at 2:11:13 PM permalink | |
Fleastiff Member since: Oct 27, 2012 Threads: 62 Posts: 7831 | If there is a mortgage there is a lawyer somewhere watching to see there are no liens ... one woman with a paid off mortgage had her house sold for a five dollar sewer lien some lawyer bought on spec. Better off investing in a large plot and a small house. |
November 5th, 2018 at 2:20:20 PM permalink | |
AZDuffman Member since: Oct 24, 2012 Threads: 135 Posts: 18201 |
You pay those things indirectly if you rent and direct if you do not pay off, so it does not matter. What does matter is the size of the payments. The President is a fink. |
November 5th, 2018 at 3:15:40 PM permalink | |
Evenbob Member since: Oct 24, 2012 Threads: 146 Posts: 25011 |
You either have very small mortgage payments or high property taxes. I live 200 feet for the urban/rural line, on the rural side. I pay $1500 a year in taxes, $125 a month. When I had a mortgage the taxes and insurance were included in the $450 payment. But that was the 80's, my taxes were a lot lower. If you take a risk, you may lose. If you never take a risk, you will always lose. |
November 5th, 2018 at 5:28:47 PM permalink | |
JimRockford Member since: Sep 18, 2015 Threads: 2 Posts: 971 |
Both actually. I'm at the tail end of my mortgage, I'll probably write a check to pay it off in January. My area has grown exponentially. Valuations and tax rates have gone up over the years while my mortgage payment has not. The mind hungers for that on which it feeds. |
November 5th, 2018 at 6:11:54 PM permalink | |
kenarman Member since: Oct 24, 2012 Threads: 14 Posts: 4491 | No one has mentioned one of the major costs of owning a home. As you pay down your mortgage the equity increases. If this equity was not tied up in your home you would be able to invest it and have it earn income for you. Most homes rent for less than a full mortgage payment, taxes etc. If your timing is right and you hit a big run up in real estate prices you do good. If you hit a flat stretch or a falling real estate market a renter probably does better if you take in your loss of equity. "but if you make yourselves sheep, the wolves will eat you." Benjamin Franklin |
November 5th, 2018 at 7:24:29 PM permalink | |
Evenbob Member since: Oct 24, 2012 Threads: 146 Posts: 25011 |
I've always sided with the Jewish philosophy that being the landlord is far better than being the tenant. In fact, one of the roots of antisemitism in Europe is that all the landlords were Jews. They wanted their rent in good times and bad, and came to be hated for being smart enough to control the property and the banks. If you take a risk, you may lose. If you never take a risk, you will always lose. |
November 5th, 2018 at 8:38:42 PM permalink | |
Dalex64 Member since: Mar 8, 2014 Threads: 3 Posts: 3687 |
In my area, apartment rental is about 50% more than my total house payment (for an apartment that is smaller than my house) and a quick look at comparable homes for rent in my area, those are at least double and some triple what I am paying. "Everyone is entitled to his own opinion, but not to his own facts." Daniel Patrick Moynihan |