patrick.net

RentingForHalfTheCost says

Yah, great time to join the chaos. Not for the weak of heart. Good luck to all the over-fertilized yards out there.

You seem angry on other peoples behalf. Your situation, as I recall, is very sweet. Low rent, very nice pad. I don't understand the reason for the vehemence in your post. While buying now may not be the best investment (in your opinion) there is no way banks are going to let someone get in way over their heads like they did a few years ago. So the risk of the current RE market fucking up the economy is relatively weak.

Bigsby says

Yes, I see. Families living cheque to cheque, who could be making 6 figure salaries as you state, clearly should not buy a home.

Absolutely...if it costs $600k for the the house.

It's all about the ratio of price to income.

BayArea says

Well yes, lol, but then watch what happens with your 29.917 years of payments (on top of your original DP) after that.

Presumably, one would be intelligent enough to put their home up for sale rather than let the bank take it after paying on it for 29.917 years.

Please don't telll me that they are underwater after 29.9 years of payments...

rowemoore says

No you wouldn't. And I highly doubt you'd argue that a guy making 1 mil/yr would punch some guy making 20 mil/yr if the latter made an arrogant comment about the former's lifestyle.

If I was scammed into buying a piece of the American dream only later to find out that all I was doing was paying down some realtors Mercedes and adding a fresh layer of white marine paint on some bankers oversized yacht I would be pissed already. Many are and they should be. Now someone who doesn't know me comes around and joins the mix. I tell them I am living check-to-check and they say I probably have a good cash savings. I say "huh? No". Then they say "What? that is silly". Yup, I would punch them, and it wouldn't matter what financial class either of us were from. Done deal!

wthrfrk80 says

Bigsby says

Yes, I see. Families living cheque to cheque, who could be making 6 figure salaries as you state, clearly should not buy a home.

Absolutely...if it costs $600k for the the house.

It's all about the ratio of price to income.

Glad someone is paying attention here.

The "bank" owns people's houses until the mortgage is paid off? What if they buy their homes for cash from the beginning? Then none of those pesky banksters ever get to take a cut.

Now if you could just prepay a lifetime's worth of property taxes in advance, then you really would own your home.

Bigsby says

Yes, I see. Families living cheque to cheque, who could be making 6 figure salaries as you state, clearly should not buy a home.

Shouldn't buy a 1+ million dollar home with 20% down when the 20% down is all their savings. Add a 30% crash and now you lost your savings (100%) and are living check-to-check. Awesome stuff!

the people living check to check who bought in 05/06 and put zero down and then took massive HELOC (never to be repaid) and then lived there rent free 3 years before getting foreclosed and then getting 2k cash for keys did pretty well.

sorry for run on sentence! ha.

In general, I agree with the assessment that it is not a good idea to buy for only a 5-7 year period if all you do is make minimum payments. This is not guaranteed to beat renting in normal circumstances. However, if you prepay the principal (which implies that you did not buy above your means) and kill the debt in about 10 years - then you have options: 1 - sell and rent, 2 - keep the pad and "collect the dividend" - difference between market rate rent and your property tax + hoa payment plus whatever writeoff you can generate off the property tax or 3 - use the completely paid off home - your equity to move up to new home and again borrow below your means. I think the person in this situation can fully assess their option and their option pool will clearly leave them in a better situation that either the renter or someone who only made minimum payment on mortgage.

Bigsby says

You'll just have to see how many years you spent renting and what the current house prices are in the BA when that time comes. It doesn't look that great for you as things stand.

What the hell are you talking about. Every year since 2007 I am in a better and better situation. Next year will be the same I'm sure. And the year after and after. I'll buy when I think that trend will stop. We are not even close yet from where I stand. Geesh.

RentingForHalfTheCost says

Yup, I would punch them, and it wouldn't matter what financial class either of us were from. Done deal!

And you would go to jail and/or be sued.

I guess I don't OWN my LIFE or my FREEDOM, since I have to pay all kinds of taxes to the government. If I don't they will lock me up. Try not paying income taxes and see what happens.

These threads are stupid, and a waste of time.

rowemoore says

RentingForHalfTheCost says

Yup, I would punch them, and it wouldn't matter what financial class either of us were from. Done deal!

And you would go to jail and/or be sued.

Then I would get the best deal possible. My rent paid for by the taxpayers. Do I own my cell? I can paint and put as many holes in the cement walls as I like. That qualifies for owning in many people's eyes.

woppa says

I guess I don't OWN my LIFE or my FREEDOM, since I have to pay all kinds of taxes to the government. If I don't they will lock me up. Try not paying income taxes and see what happens.

These threads are stupid, and a waste of time.

You don't own time either. ;)

RentingForHalfTheCost says

Bigsby says

Yes, I see. Families living cheque to cheque, who could be making 6 figure salaries as you state, clearly should not buy a home.

Shouldn't buy a 1+ million dollar home with 20% down when the 20% down is all their savings. Add a 30% crash and now you lost your savings (100%) and are living check-to-check. Awesome stuff!

You do realize that six figure salaries cover rather a wide range. As do house prices. But hey, just create a scenario that best supports your argument whilst simultaneously ignoring all the other more logical possibilities.

RentingForHalfTheCost says

Bigsby says

You'll just have to see how many years you spent renting and what the current house prices are in the BA when that time comes. It doesn't look that great for you as things stand.

What the hell are you talking about. Every year since 2007 I am in a better and better situation. Next year will be the same I'm sure. And the year after and after. I'll buy when I think that trend will stop. We are not even close yet from where I stand. Geesh.

What am I talking about? You make claims of expecting a further 50-70%+ drop in prices and the like. When exactly will you be willing or able to buy a property? What if house prices track at or just below the rate of inflation for the next 20 years? What if they lose value but nowhere near the extent that you predict or need? Will you keep waiting and waiting then? Your 5/10/15/20... years of further renting may not look like such a good financial decision then. Do you see my point now?

Call it Crazy says

You NEVER own your home, PERIOD... even if it is mortgage free!! Try not making real estate tax payments and see who comes knocking on your door. You will ALWAYS be RENTING your house.

Correct. We have a winner!

wthrfrk80 says

Call it Crazy says

You NEVER own your home, PERIOD... even if it is mortgage free!! Try not making real estate tax payments and see who comes knocking on your door. You will ALWAYS be RENTING your house.

Correct. We have a winner!

Try buying a house, paying off the mortgage, and then selling it. Are you seriously telling me you never owned it then?

woppa says

I guess I don't OWN my LIFE or my FREEDOM, since I have to pay all kinds of taxes to the government. If I don't they will lock me up. Try not paying income taxes and see what happens.

Exactly right. Thanks to the income tax, no one even owns the fruits of their own labor. We are no longer a free people.

woppa says

These threads are stupid, and a waste of time.

Or do they demonstrate just how much we've really lost?

Do you EFFING RETARDS realize that taxes go to many things like roads and bridges and schools and all kinds of other crap that may or may not benefit you directly? I mean what do you think these taxes go towards? Yeah, we pay property taxes, doesn't mean we don't own the home. If you have no mortgage, you own that home. I mean to say otherwise is just moronic. Taxes have their purpose, and it's not to claim ownership of your home. If you don't want to pay taxes, go live off the grid in the jungle somewhere, subsist on your own. Simple as that right?

woppa says

I mean what do you think these taxes go towards?

Ton of taxes goes to waste govt. spending and 6 figure pensions and free health care for lifetime for the govt. employees.

Bigsby says

Try buying a house, paying off the mortgage, and then selling it. Are you seriously telling me you never owned it then?

You have "some" ownership of it, I suppose. It's at best an asset that pays negative dividends and slowly rots in the rain. It's necessary for shelter.

The only reason (I can think of) to "buy" a house is to
A) rent it to someone else (i.e. get rental income)
B) rent it to yourself (i.e. avoid paying someone else rent)

Every other reason is emotional.

Sure, but that is an entirely different subject. Tons of local and state taxes also go towards roads so you can drive to work, schools so your kids can learn for free. Federal taxes go largely towards defense, and medicare/medicaid so your parents can have health insurance. You are really going to cry about paying taxes because that means you don't own you house? A ninth grader could debate that ridiculous statement into the ground.

wthrfrk80 says

Bigsby says

Try buying a house, paying off the mortgage, and then selling it. Are you seriously telling me you never owned it then?

You have "some" ownership of it, I suppose. It's at best an asset that pays negative dividends and slowly rots in the rain. It's necessary for shelter.

The only reason (I can think of) to "buy" a house is to

A) rent it to someone else (i.e. get rental income)

B) rent it to yourself (i.e. avoid paying someone else rent)

Every other reason is emotional.

I bought my house because I pay less for it than renting a one bedroom in a grimy apartment building, and I will pay a whole lot less in 15 years. I get a deduction on my taxes, (whether or not this is a good thing, I get it nonetheless) and I don't have to smell someones disgusting ciggarete smoke wofting in through my kitchen window from the next apartment over, or hear footsteps above me from the 300+ pound couple and there 35 pound 1 year old. Those reasons are not made up, that is actual fact. *I did have to invest some money into the house in renovations and down payment, but I am paying less than my rent was, and I have an extra bedroom and a WAY nicer kitchen.

woppa says

You are really going to cry about paying taxes because that means you don't own you house? A ninth grader could debate that ridiculous statement into the ground.

I'm not "crying" about anything. But I generally consider ownership as keeping something w/o paying continuously for the privilege.

Do whatever you want with your own money.

Anyone else care to make stupid comments/assumptions about buying/renting? If you are unable to figure out whether or not buying or renting is right for you, I will be glad to come slap you in the back of your head after referring you to 900 other threads talking about the same damn ridiculous question with the same damn ridiculous answers, most of which are completely moronic.

Believe it or not, I'm considering buying a house. Where I live it's cheaper than renting.

Other areas are so expensive it can be better to rent.

I'm just trying to point out that the "you must buy a house to secure your financial future" meme is often b.s. A house is a place to live, not an investment.

Like I said, go to the jungles, and live with a tribe. But when you tell them to go screw themselves cause you do not feel like sharing your kill with the rest of the tribe, you might want to watch your back.

wthrfrk80 says

Believe it or not, I'm considering buying a house. Where I live it's cheaper than renting.

Other areas are so expensive it can be better to rent.

I'm just trying to point out that the "you must buy a house to secure your financial future" meme is often b.s. A house is a place to live, not an investment.

Yes, this is the logical assessment that I expect from patrick.net frequenters. It just drives me nuts when I hear someone say you don't own a house cause you pay taxes on it.

Call it Crazy says

We're getting closer... a calculator is your best friend!!!

Besides your monthly payment, now add the loss of use/investment of your down payment for any other use, add in your closing and legal costs both buying AND selling, add in the money spent on the current renovations and the money you need to save for future repairs and renovations and don't forget to add the increases in costs of your property taxes and homeowners insurance.

Now take your calculator and put ALL those into your "monthly costs" by "owning" and then come back at tell us which way is better...

Yes, yes. There are both costs and benefits involved in purchasing a house. Your point has been made hundreds, probably thousands, of times before.

Ok buddy, the money spent on renovations was half the amount of increase in my appraisal. My mortgage/taxes are less than my rent and GOING DOWN, NOT UP 3% a year like they were in my apartment. Everything in my house is beautiful, hardwood floors, not linoleum. I have a yard, instead of living next to a nasty highway that bothered my wifes athsma. I have an additional bedroom and more space in the living room. There is no comparison in my case, owning is by far the better option, and every year the numbers make more sense due to the simple fact that I am that much closer to paying off my mortgage, rather than seeing my rent rise.

Call it Crazy says

OK, based on your argument, if you don't pay your property taxes the sheriff comes and only takes the LAND your house is on, and he leaves the HOUSE for you, because you OWN it without a mortgage, right???? You can just take your paid off house and move it somewhere else, right??

Do I understand your point??

You are liable to taxation on your property. That doesn't mean you don't own it, or are you saying that if you do pay your taxes, sell your house, and collect the money for it that you still never owned the property?

Call it Crazy says

Bigsby says

Try buying a house, paying off the mortgage, and then selling it. Are you seriously telling me you never owned it then?

You RENTED it from the bank and paid them a tremendous amount of INTEREST for the privilege!! You hopefully gained some equity in the process (not every one does)...

So? You borrowed money and paid interest. Amazing. That still doesn't mean you are renting the house from the bank, does it?

Call it Crazy says

Wow, someone's rose colored glasses are really dark.

Who CARES where the taxes go, you just have to pay them if you want to continue to be the "owner" of the house. Try not paying your taxes and you'll truly see who the REAL owners of your house ends up being... (hint, it won't be YOU)...

What's your point? You could just as easily say 'continue to pay your taxes and see who the real owner of the house is - yes, the owner!'

Call it Crazy says

Right, yet some STILL can't see the big picture... I've been on both side of the equation and I admit I bought into the "American Dream" scam of home ownership. Then I finally took out the calculator and added up the TRUE cost of ownership... that's when I took off the rose colored glasses.....

You sat down and thought about whether it was a good idea for you to buy or continue to rent. Well done.

Call it Crazy says

Bigsby says

So? You borrowed money and paid interest. Amazing. That still doesn't mean you are renting the house from the bank, does it?

You tell me, who are you sending your monthly payment to??? (Hint, if you are sending a payment to someone, you don't own it..)

This is ridiculous. You aren't renting the property from the bank. You are paying down a loan you took from the bank. The two things are not the same.

Bigsby says

This is ridiculous. You aren't renting the property from the bank. You are paying down a loan you took from the bank. The two things are not the same.

They're not the same thing from a legal standpoint. But they aren't much different from a financial standpoint.

Payments made on borrowed money = interest
Payments made on borrowed houses = rent

In most of the USA, for a given house, it's cheaper to rent the money to buy the house than rent the house. But in certain expensive markets it can be cheaper to just rent a place.

Again, I'm making no absolute statements. You have to do the math. Every location is different.

Call it Crazy says

Wow, someone's rose colored glasses are really dark.

Who CARES where the taxes go, you just have to pay them if you want to continue to be the "owner" of the house. Try not paying your taxes and you'll truly see who the REAL owners of your house ends up being... (hint, it won't be YOU)...

I care where the taxes go. I do not mind paying taxes, that is a part of society. My kids go to school free of charge. I am able to go to work on roads that my taxes pay to maintain. I use public parks. I enjoy benefits from paying my taxes. Your argument that I do not own a house because I pay taxes is moronic. I could argue better that I own public parks and roads and schools better than you could argue that I DO NOT OWN MY HOUSE. THAT IS HOW MORONIC THAT ARGUMENT IS.

Oh and my 20k in down payment and 30k in renovations would have been sitting in a bank earning a whopping 1% a year AT BEST, if I were to continue renting and paying 3% rise in interests year after year. That would mean I would be losing money on that deal. My numbers are untouchable. Sure, some people make bonehead decisions when they buy a house, but not me.