patrick.net

You mean if you pay all cash ("buy without a mortgage")???

Well, that's what I'm going to do and I'm not really considering the rent/buy ratio in my case since I do not want to be a renter at age 65+.

~Misstrial

If you have bubble-era equity you're sitting on, go for it.

Try the NY Times Rent vs. Buy calculator:

http://www.nytimes.com/2007/04/10/business/2007_BUYRENT_GRAPHIC.html

I haven't validated any of the calculations I've made with it, but it uses the right variables as input.

The main consideration if you buy without a mortgage is lost opportunity. If you had taken the money and done X with it, would you be better off or not?

However, I am with Misstrial, I dont want to be renting at 65, even if it means ignoring the buy rent argument, but I do have several years to decide when to go in. The idea of being 65 and still having to worry about my investments paying for my rent is scary. I would gladly pay a penalty to own a home and not have to worry if my investments are making more money than current and future rent. If the economy goes topsy-turvy and I lose everything and my house loses all it's value, I still have a place to live. Purchasing has some major benefits which are hard to calculate in.

How to determine if it is cheaper to rent or buy DVDs, if you buy with cash and rent with a credit card? Well that depends on if you pay off your mortgage in full each month or carry a balance. Also you have to take into account how often you re-rent the same DVD or how many times you will actually watch a DVD purchased with cash. Also, the DVD’s release week is “the time to buy” as realtors are usually offering new to market discounts.

At the end of the day does it really matter which is cheaper. The next bailout plan from the government will be a mandatory tax increase for anyone that has not owned a home for more than three months in the last three years. First time buys will be given a three year grace period, but anyone that has owned a home in the last ten years will immediately be subjected to the new tax increase. The new tax revenue will be used to give everyone that buys a new home a $15000 tax rebate to help cover closing and down payments.

Would you believe I was just paid to lobby that idea to congress? Maybe not, but you would believe they would go for it.

Sorry for the thread-jacking, but I am feeling really cynical about ever wanting to buy a house again even if I would be saving $100,000 vs. renting and was offered a $50,000 tax rebate. They are lossing it.

Oh wait, may bad that is the current bailout plan. Just that it is only a $8000 rebate.

I'm in the same boat and one comparison I've made is rent cost vs how much housing has been going down in value. If I'd bought two years ago, I'd likely have lost 30-50k on the 3-5 homes I was really interested in. Even if I'd rented an equal house (been in an apartment) I'd have saved 20k-40k. So factor in the market, what its likely to do in the near future and long term, what your plans are (settling down long haul or staying only sub 7-10 years), job issues etc.. Long term I want to find a nice house to settle down in, but it makes little sense to me for many reasons (job, desire to leave area).

Personally, when I know folks who bought homes for 120k in 1997 and 140k in 2002 in decent areas (1500sqft 3/2 type homes) that hit bubble highs of 275k and 230k (via comps) I have very little incentive to buy. Life isn't always fair but I have no interest in buying into a vastly inflated market that has had no real economic basis beyond easy money/credit till it drops down to reality. One rental I looked at last month had just been bought and was 50k off its 2007 sale price, down to its 2005 price. Heck, my apartment rent is down to lower than it was 6-7 years ago and they're now offering free washer/dryers for 6 months if you sign a lease.