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Pillar of the Community
United States
3294 Posts |
Yup, that was my strategy when I got a fixed 4.75% for 30 years on my house. If we get nasty inflation, I get a free house.
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Pillar of the Community
 United States
1450 Posts |
You are assuming that wages keep up with inflation!
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Pillar of the Community
United States
3294 Posts |
I am assuming they at least stay in the ballpark yes. Businesses can't function without employees (at least not most of them) and if wages got too far behind, people would rather have their 9 hours a day back then the $1 worth of goods.
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Pillar of the Community
United States
4008 Posts |
Quote:
You got an AMEN from this corner Ed-B. Thanks, Hock. It only stands to reason that those who produce should also be the ones who decide where their money goes. Unfortunately, our politicians seem to have lost this thought. Quote:
There were tax bennies on the interest, and you got to live as you wanted. Indeed so, Fred. The tax bennies were nice but living in our own space and being able to do what we wanted with the house was also of great benefit. I'm not sure that a price can be attached to this aspect but it has considerable personal value. Quote:
EdB, does the appreciation cover what you paid,including interest ? No, Maineman, it doesn't. I haven't felt the need to massage the numbers that closely. Also not deducted was the cost for a decent apartment or rental house. If we did not live here, then we would have to live elsewhere at some other cost. If it cost $1100 a month to buy a 3700 sq. ft. house but only $800 a month to rent a place 1/3 the size, it would take some tricky figuring to know the relative values. I'm sure that a CPA would have no problem figuring all this out but as a matter of idle curiosity, it is not worth my time to nail it down to the last dollar. Quote:
The 30 year plan is complete foolishness. Not necessarily. When one is young and cash-poor but still in need of a home and a way to build equity, the 30-year mortgage is not necessarily a bad place to start. If mortgage rates drop significantly, one can always re-fi to a 15-year loan. We did this in 2003 and chopped 7 years off our loan. Yes, it would be ideal to be able to pay cash for a home but very few people are able to do that. We would have done that if we could. |
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Pillar of the Community
United States
3592 Posts |
Let me explain my position...30 yr loan 5% fixed for 150K...after 5 years you've paid 36K in interest and reduced your loan by 12K...not very good... When you're young, best to go with what you need, not want. I've paid off two mortgages since the age of 30...one on my house after 8 years, one on investment property for 12 years.Having spent 24 years in the housing business, I saw the bubble coming with the advent of the 30 and 40 year mortgage along with the 4000 sf house.None of the upper management would listen when I started warning back in 05, and only two have given me credit after the fact.
Maybe it sounds a little difficult, but retiring without a pension at 51 was worth every sacrifice...getting to spend lots of time with my family now..priceless.
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Pillar of the Community
United States
5837 Posts |
About 7 yr on a 30 yr loan is 99% interest. Is that about the right number Maineman?
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Pillar of the Community
United States
3592 Posts |
mac...it is about 75% interest...my feelings are if you cannot afford a 20 year mortgage, you are buying way above your means, then add the fact that you paid twice as much as the buying price of your house,it just doesn't make financial sense. A 15 year mortgage is your best bet if you must borrow.
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Rest in Peace
United States
9104 Posts |
Wages? What if you have the money you would have spent on housing invested somewhere that it's getting a better safe return?
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Pillar of the Community
United States
4008 Posts |
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Maybe it sounds a little difficult, but retiring without a pension at 51 was worth every sacrifice...getting to spend lots of time with my family now..priceless. Indeed so. My wife retired at 51 and I retired at 55... so, we're not exactly suffering either.  |
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Pillar of the Community
United States
3592 Posts |
Quote:
Indeed so. My wife retired at 51 and I retired at 55... so, we're not exactly suffering either And that is exactly why I preach so hard against debt, most of my friends will be working into their 70's because of it....it's not as much fun fishing alone  |
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Pillar of the Community
United States
2661 Posts |
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If any wealth is to be "redistributed", then let those who created it see to the redistribution as they see fit. If we did that then they would "redistribute what little the rest of have left, right into their own pockets. |
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Pillar of the Community
United States
1026 Posts |
Well I feel sorry for the younger generation, however me and my wife never charged anything in our life. We had our house paid for by the time we were 45 made extra payments when we could. Never paid one cent of interest to the credit card companies I have never had one the wife does but she is good and always pad them off at the end of the month so no interest.
We did not have new cars and much for the first twenty five years of our marriage but we also had only one payment the house.
But houses are so expensive these days back in 2002 I new this housing thing had to happen the value was way to much on them.
We paid think it was around $22,000 for our house since then made it twice as big though but guess it is valued at around $225.000 now here in Central PA. Anyway prices for houses are still crazy here and they are still building nothing but town houses or BIG houses.
Credit is what consumes all your earnings.
Edited by Brucec
07/23/2011 09:43 am
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Pillar of the Community
United States
3592 Posts |
Quote:
Credit is what consumes all your earnings I wish our government would understand that, or at least care ! |
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Pillar of the Community
United States
3592 Posts |
Quote:
If we did that then they would "redistribute what little the rest of have left, right into their own pockets Tim, I think he means "let those who earn it decide if they want to give it to somebody else". Which goes with a saying I heard recently " A government cannot give away anything without taking it from somebody else first" |
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Pillar of the Community
United States
4008 Posts |
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And that is exactly why I preach so hard against debt, most of my friends will be working into their 70's because of it....it's not as much fun fishing alone Wife and I never had much in the way of debt. Yes, we have a mortgage but our free cash flow is 6-7 times that, so servicing the debt is not any kind of problem. We've never had ANY credit card debt. Paid cash for all but one of our cars and then paid that off in 2 years. Makes me chuckle whenever one of those things comes in the mail that promises to "reduce your debt" or "improve your credit score". Actually, I have no idea what our credit score is and could not care less. We have no need to borrow any money again, so... pffft!  Quote:
Tim, I think he means "let those who earn it decide if they want to give it to somebody else". Exactly so. Quote:
Which goes with a saying I heard recently " A government cannot give away anything without taking it from somebody else first" Yep, which is right up there with, "A government strong enough to give you everything you want is also strong enough to take away everything you have". |
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Posted 07/20/2011 09:19 am
