Reply
Established Member
Posts: 51
Registered: ‎06-25-2007
0

Forget about buying a house?

[ Edited ]
Forget the common wisdom about home-buyers' tax advantages:   Your new home will be a liability.   That new home of yours will not generate income or capital gains for you until the day you sell it — if then. It will, however, be sucking money from your bank accounts every single month. Electrical bills and utility bills may also increase, and dramatically. Mortgage payments will almost certainly be larger than your previous rental payments. And now you'll have to worry about your home's lawn maintenance and roof maintenance and electrical maintenance and . . ..


Message Edited by bobkelly on 07-02-2007 09:37 PM
Moderator Emeritus
Posts: 16,374
Registered: ‎03-12-2007
0

Re: Forget about buying a house?

[ Edited ]


bobkelly wrote:
Forget the common wisdom about home-buyers' tax advantages:   Your new home will be a liability.   That new home of yours won't generate income or capital gains for you until the day you sell it — if then. It will, however, be sucking money from your bank accounts every single month. Electrical bills and utility bills may also increase, and dramatically. Mortgage payments will almost certainly be larger than your previous rental payments. And now you'll have to worry about your home's lawn maintenance and roof maintenance and electrical maintenance and . . ..


I disagree, a mortgage is a forced savings! And your link up there or whatever it is is humbug!


Message Edited by fused111 on 07-02-2007 04:16 PM
Credit Profile -
FICO 08 Scores (03-26-2015): EQ 814, EX 817, TU 822
All three scores were 850. Lost points for not having an open installment TL. So, BE WARNED!!!!!
Credit History: 26 years ~ AAoA: 13 years ~ Util: 1% ~ Inqs: EX 1, EQ 1

Credit Cards: Amex BCP ~ Amex Clear ~ Amex Platinum ~ Barclay Ring Mastercard ~ Chase Freedom Visa ~ CITI Dividend Platinum World Mastercard ~ FIA Fidelity Investment Platinum Visa ~ First Hawaiian Bank Gold Visa
Established Contributor
Posts: 905
Registered: ‎05-09-2007
0

Re: Forget about buying a house?



bobkelly wrote:
Forget the common wisdom about home-buyers' tax advantages:   Your new home will be a liability.   That new home of yours won't generate income or capital gains for you until the day you sell it — if then. It will, however, be sucking money from your bank accounts every single month. Electrical bills and utility bills may also increase, and dramatically. Mortgage payments will almost certainly be larger than your previous rental payments. And now you'll have to worry about your home's lawn maintenance and roof maintenance and electrical maintenance and . . ..


What the heck??? Real estate value has increased at an average rate of 4% EVERY YEAR since the 1930's... COMPOUNDED INCREASES that typically help retirees pay for end of life care, young resposible couples to move into more suitable homes to fit their growing families. Even if you rent a shack in the middle of nowhere, you'll need to pay for electricity and other utilities.
 
This blows my mind!!!
 
Rob
Established Member
Posts: 51
Registered: ‎06-25-2007
0

Re: Forget about buying a house?

So how do you make money on your home mortgage?  YOU DON"T until you sell it ....It's a liability until you sell it and cash out.  A liability costs you money, and generates no income. Sounds like a home mortage to me. 
Senior Contributor
Posts: 4,831
Registered: ‎04-20-2007
0

Re: Forget about buying a house?

RE is only good as long as it is increasing in value. Most areas are seeing price drops the last year or so and I think it is going to get a bunch worse before it stabilizes. There are still pockets of strength but I would not be a buyer at these levels. There can be other reasons for owning than economic though especially if you have a family. IF you can buy right and don't mind not seeing appreciation go ahead and buy. Friend of mine sold a two bedroom condo and flipped it for a larger ranch home in an over 55 for the same price. You can get deals but don't expect your house to be an ATM like it has the past 20 years or so.
Established Contributor
Posts: 905
Registered: ‎05-09-2007
0

Re: Forget about buying a house?

If you start with a home value of $300,000 30 year fixed @ 7% payment equals >>> $1,995.91
 
Total payments after 360 months >>> $718,527.60
 
Compounded interest @ 4% per year (average RE growth) >>>> $973,019.25
 
Net ROI >>> $254,491.40
 
That's how you make money on a mortgage... If you think it will cost more than that to maintain your home... You've got some issues.
Established Contributor
Posts: 630
Registered: ‎06-20-2007
0

Re: Forget about buying a house?

And you have not even talked about  the tax benefits!
9/18/08 TU=707 EQ=706 EX=702
Frequent Contributor
Posts: 440
Registered: ‎06-11-2007
0

Re: Forget about buying a house?

And when you rent......you might as well be throwing your money in the trash. When ya move out of your rental....you have nothing to show for it. I bought my house in 2001, and already have about 72,000.00 equity in it. What you got, bob????
Super Contributor
Posts: 8,178
Registered: ‎03-25-2007
0

Re: Forget about buying a house?



bobkelly wrote:
Forget the common wisdom about home-buyers' tax advantages:   Your new home will be a liability.   That new home of yours will not generate income or capital gains for you until the day you sell it — if then. It will, however, be sucking money from your bank accounts every single month. Electrical bills and utility bills may also increase, and dramatically. Mortgage payments will almost certainly be larger than your previous rental payments. And now you'll have to worry about your home's lawn maintenance and roof maintenance and electrical maintenance and . . ..


Message Edited by bobkelly on 07-02-2007 09:37 PM


I agree with Midnight...

MidnightVoice wrote:


bobkelly wrote:
Isn't there anybody in these message boards who instead of raising their FICO to get into more and more debt, wants to BE DEBT FREE?!?!?!



Hmmmm. I am tempted be less than supportive :smileyvery-happy: But I will refrain :smileyvery-happy:


The slide from grace is really more like gliding
And I've found the trick is not to stop the sliding
But to find a graceful way of staying slid
Established Contributor
Posts: 905
Registered: ‎05-09-2007
0

Re: Forget about buying a house?

Advertiser Disclosure: The listings that appear on myFICO are from companies from which myFICO receives compensation, which may impact how and where products appear on myFICO (including, for example, the order in which they appear). myFICO does not review or include all companies or all available products.

Copyright ©2001-2015 Fair Isaac Corporation. All rights reserved.   | Terms of Use | Privacy Policy | Sitemap

IMPORTANT INFORMATION: All FICO® Score products made available on myFICO.com include a FICO® Score 8, along with additional FICO® Score versions. Your lender or insurer may use a different FICO® Score than the versions you receive from myFICO, or another type of credit score altogether. Learn more

FICO, myFICO, Score Watch, The score lenders use, and The Score That Matters are trademarks or registered trademarks of Fair Isaac Corporation. Equifax Credit Report is a trademark of Equifax, Inc. and its affiliated companies. Many factors affect your FICO Score and the interest rates you may receive. Fair Isaac is not a credit repair organization as defined under federal or state law, including the Credit Repair Organizations Act. Fair Isaac does not provide "credit repair" services or advice or assistance regarding "rebuilding" or "improving" your credit record, credit history or credit rating. FTC's website on credit.