"What would YOU do (not what you can do)? Put yourself in their shoes and put yourself on the fastest path to home ownership on the Peninsula (say $1.2-1.5M home price which means at least a quarter of a million dollars of down payment). Please help me detail a plan to get them into a small house on the Peninsula."
The peninsula is not a market for young couple. Most are in their late 40's. It's too competitive with the way way way way too few supplies. The mountain and bay(narrow as heck) and economic viability is all you need to know that peninsula price will be the last to fall and first to rise.
* The SFBA is home of 35 years old directors and 40 year old VP's and 45 year old execs. If you are thinking 2% annual salary appreciation, just throw the peninsula dream out the window. Think double salary in 5 years and triple in 10. short term bonus, long term bonus are the needed windfalls. I've seen way too many professionals do contract work for $125-150 bucks an hour and they'll laugh at your 100K employee salary. Think 200K or 400K total.
* save on cost you can control. For two people, live in a one bedroom apartment and keep it under $2000 a month. There are some leverage when couple live together. cook more and do recreational activities like hiking. Go to Mexico, not Hawaii. Eat free food and office perks. If you are too busy, its hard to spend money.
*An up and coming couple should be able to save 6K -10K a month or 70K to 120K a year. That's not including windfall if you work for the right company and you get a six digit cash bonus. Most young couple whom receives a nice RSU payout or stock options are signing up for buying agent next week. Couples that have 250K in cash and renting are basically in the market.
* If use have bank of mom and dad, use it. Young buyers are probably backed by rich parents whom worked for Facebook or other legacy company and can supply every kid with 500K cash down payment. It is what it is. If you want to be a young buyer, you'll need money from mom and dad to compete. That's how it is in the rest of the world. As a parent, saving for a downpayment is unproductive, If my kids are able to pay their mortgage at say 28, I'll send them half the down payment ((with them the other half) so they can skip the five year wait. It's not because Im rich, it just passing the money before I die. If I die at 80 and my kid is 50,, there is no point of the inheritance as they are 50 already, wtf. I believe in giving kids inheritance when they are mature enough and find it useful as young adults /p>
From 2012-2015, there has been more inventory than at any point in time from 1999-2005. Low sales growth is due to demand, not supply. Demand is low because buyers have insufficient incomes and assets – and this is due to demographics, debt and the Great Recession.
Prices ran up what 60-100% from 2012-2015. If that is your reason, renters will be driven to the ground. (If you claim low demand and prices are bat shit crazy) It's quite obvious that high housing price is due to shortage of real homes ()in desirable areas) and especially homes for sale (in desirable areas).
Revenue's take super majority in CA. (Thank goodness for Howard Jarvis)
Every tax increase in this country will pass if the threshold is 50%. I would think it makes sense to play the tax increase card during recessions. The money should come out of general funds which are healthy. If education is important, scrap something that is not important. You can't tell me everything needs to be fully funded.
Sorry, I don't but for a second a family like Bernie Sanders age 74 making 65K will pay 14.7% in federal income tax. (ETR for federal income tax only which excludes SS and medicare)
It's a prime example of facts need checking.
Second, the rate difference of 1%, there is no point and quite a useless argument anyway. Notwitstanding, I don't buy for a second a 74 year old married filer will pay 14.7% anyway
We all know why is rate is low. He's old, he's supports his spouse and he has very basic deductions everyone has. 27K in federal income tax (52K in federal/state/county) is a shitload of money taken from a 74 year old whom paid taxes for 55 years. The man paid enough.
On a depreciating asset, why would someone tie up their liquid funds and lose value, when they can get get a better return using OPM?
You are bringing up something this is irrelevant, quite impressive. Depreciating/Appreciating, you make up all the rules.
In the end, the decision is whether to pay off the mortgage to avoid the 3% cash net of tax, or deploy that cash somewhere for a return better than 3% net of tax. The person will own the home and ride with it regardless.
payment #1 and payment #360 is the same. Saying the bank owns you is quite a stretch. You basically ate them alive. Would you sign a 30 year lease with no rent escalation, hell fking no.
Freedom comes from financial independence, which is a function of wealth, which is asset less debts. All the rich ass mofo have huge debt and ALL the assets.
It's just my preference that I let the bank takes 80% of the house and me the other 20. Every asset in this world is own by some bank that takes the first 60%. With insurance, you would know that you are on the hook for the first 20% anyway. I can do that letting the bank take 80% all the same.
There is no dilemma here, there are plenty of choices than pay off a long term mortgage that costs less than 3%, net of tax.
If you think it is such a good deal, would you lend me 400K at 3% interest rate, fixed over 30 years? You have recourse and monthly payment, that's it. Hell fking no. So the debt is an asset like no other
Most people are better off paying their mortgage off and saving all that interest over X years. There is no better feeling than not owing anyone a penny, a free man!
I respectfully disagree. There is no worst feeling than owning the property 100%. If there is a flood/earthquake or other SHTF, you own it all. If the bank owns 80% of it, it is their problem. They have the house, you have all the money.
Based on Bernie Sanders long ass political career, his pension is worth at least $2M. He has more money than what he can do with. Bernie Sanders have no debt problem, he has a problem with too much money and not enough time.
Obviously I respect that he is running for president and quite not rich. Money/debt problems, hardly.
"With a family income of roughly $205,000 in 2014, Sanders and his wife Jane, who file their taxes jointly, are in the 28% tax bracket. But they claim deductions that lower their tax rate as a percentage of their adjusted gross income to 13.5%. The average filer, with an income of $65,021, pays an effective rate of 14.7%, according to the IRS."
The average filer is a single filer. At least compare family to family.
14.7% and 13.5% is hardly earth shattering. B Sanders paid more than 3x more tax in absolute than the normal Joe. Something is not comparing. A family with 65K in income sure as heck aint paying 14.5% in fed tax, more like 10%.
"The couple deducted $9,666 in state and local income taxes and another $14,843 in real-estate taxes, presumably on their residence in Burlington, Vt. "
That pretty much double their tax burden another 12% to 26%. So I'm sure that is well above avg.
(He's paying over $22,000 a year in mortgage INTEREST at age 74, what is he, NUTS!!!!) And he still HAS a mortgage at his age??? Really??
he's making 205K. the interest is productive as he has shelter and avoid something even more nuts in old age "RENT" If you are 74 and renting, that's a scary thought.