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re: WSJ: Wall Street Has Spent Billions Buying Homes. A Crackdown Is Looming.
Posted on 4/29/24 at 2:30 pm to Dawgfanman
Posted on 4/29/24 at 2:30 pm to Dawgfanman
quote:
But that doesn’t mean the person paying on it “made” any money. Say a person buys a house at 425k 7.5% interest for 30 years (with 20% down). By the time they pay off the mortgage they will have spent well over a million dollars in payments (principal, interest, down payment) not to mention repairs, upgrades, taxes, upkeep, insurance, etc.
Yes, and if they rent for 30 years they will have exactly $0 in rent.
One of the reasons you own is that you lock in your payment. 7.5% is a lot, but in 15 years your payment is still locked in as the same and is not a lot.
In 15 years your rent has still gone up and up and up. In 15 years you have $0 in assets from renting.
2
Posted on 4/29/24 at 2:38 pm to baldona
quote:
Yes, and if they rent for 30 years they will have exactly $0 in rent.
If you invest the down payment I mentioned above you’d have 700k or so after 30 years, maybe more.
quote:
One of the reasons you own is that you lock in your payment. 7.5% is a lot, but in 15 years your payment is still locked in as the same and is not a lot. In 15 years your rent has still gone up and up and up. In 15 years you have $0 in assets from renting.
In 15 years you’ll need a new roof, water heater, a/c, deck, flooring, etc.
People drastically underestimate the costs of home ownership and that’s one of the reason so many refinance or get a second mortgage or HELOC, to pay all those expenses.
Most people break even, at best, when owning a home long term. If they truly calculate their cost of ownership.
And your payment isn’t locked in, taxes go up, insurance goes up.
This post was edited on 4/29/24 at 2:40 pm
Posted on 4/29/24 at 3:29 pm to baldona
quote:
One of the reasons you own is that you lock in your payment. 7.5% is a lot, but in 15 years your payment is still locked in
If remaining locked in at 7.5% interest in 15 years is still the best option then we're in a lot of trouble.
The only thing you truly "lock in" when buying is the home price. You only "date" the rate you're paying.
And rents fluctuate up and down just like the housing market.
This post was edited on 4/29/24 at 3:30 pm
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