Poll: Do you own a house?

someone modified my options....

Two first posts in a row! I'm pathetic!

We hate living in an apartment. But when you don't have "real" jobs, you don't have much of a choice. Someday.

EDIT:� Dang.� Thought I was first.

we live in a two-flat. our lease is up next may. we're hoping to at least rent a house once we move out of here.

I wish I did, and I hope to someday, but it will continue to be a pipe dream until I get some more money.

my boyfriend has before, but we sold it. we'll buy one someday soon.

Got me a nice house, plunked down 20% upon signing. I recommend doing that for anyone who can afford to, because basically the mortgage companies become your bitch. Walk in with 20% and you get to waive stuff like escow, points, and PMI, and basically (if your credit is also good) demand the rock bottom lowest interest rate, which is sometimes lower than the lowest one they advertise.

Also, I highly recommend getting a 15 year note, not a 30 or 20 year note. Again, if you can afford it (and if you can't you should probably be reconsidering if you can afford a house), it makes your debt much smaller and you end up paying far less interest. Then make at least 2 extra mortgage payments a year divided out into montly chunks and watch your interest payments fall even faster. Oh, and make sure it's a FIXED mortgage. Variable will kill you. If you're stuck with a high interest fixed mortgage you can always refinance to a lower fixed rate later (the interest rate difference needs to be at least 2% to make that worthwhile).

I currently make 3 extra payments per year and am projecting to pay off my 15 year note in 8 years. So the next house will be easier to buy with that big chunk o' cash from the sale of this house serving as downpayment.

Make sure that there's a berth for your yacht too...

*shrug* Hey, if you don't want to be a responsible homeowner, that's you're business. Just don't whine when you can't make the payments or the mortgage company is getting 250% of what your house is worth.

It's simple math. If you can't afford to put at least 10% down on a home, you can't afford a home.

It's simple math. If you can't afford to put at least 10% down on a home, you can't afford a home.

that's pretty much true, and that's fine, but really, the rest of your post had the tone of "I have lots and lots of money and can pay off my home in just 8 years! Look at me I'm rich!"

Perception is a weird thing. Because I read it and my reaction was just "wow, he knows a lot. I know who I'll be talking to if/when I get my act together to get a house."�� I wonder if some would have read it differently if it had come from someone who has never rubbed people the wrong way.

Huh...
I didn't get that impression at all.

I completely got that impression too, so you aren't alone.

Regardless, he's right on all points.

I would advise slightly differently:� get the 30 year mortgage.� Nothing prevents you from paying it off in 15 years if you can, and that's a great idea*.� But in my judgment it's better to have the flexibility to pay out less if you need to, in case something else comes up in your life that requires cash.�

*The other reason to pay more slowly is that (in the US) mortgage interest is a tax deduction, and it may be wiser�(especially early in the loan)�to pay less on your mortgage, deduct the interest from your taxes�and concentrate on savings (if you can get better return on your investments than the rate you're paying on the loan) and especially on eliminating other kinds of debt.� If your mortgage is your only debt though, you're right... pay it off, and good for you!

Another point:� Refinancing can�absolutely be worth it even at a rate change of less than a percent.� Don't stick to that 2% rule.� You can get no points/no closing costs refinance deals that make it worth your time for _half_ a percent.� I've done this three times in the last few years.

Also, you needn't reconsider whether you can afford to be a homeowner if you can't pay off your house in 15 years!

Right, now I'm boring even myself.� Back to your regularly scheduled thread.

This is true. There are alot of good refinancing deals out there, but be careful with some, some of the "no closing costs" ones I've seen tack the closing costs on as part of the refinance amount, thus "hiding" the fees.

*shrug* There are obviously alot of factors for buying a house (it IS an equity investment after all), as a general rule however, a 15 year note is the most economical and does not increase your debt significantly.

I didn't have enough for 10% down - housing in CA is very expensive. Median home price where I live is > $400K. However, I did a 80-15-5 split to avoid PMI, paid down the second like crazy, and then refi'd. The house had appreciated enought that the new loan was < 80% of the "value" so no PMI. It's a 30 year note, but I'm paying on a 15 year schedule. That way if I lose my job (also a serious issue in CA high tech when I bought) my minimums are lower.

The cost of a 30 year note versus a 15 year note is HUGE. The difference in yearly interest in the first few years is not that big of a deal, so you're not saving much on taxes by going to a 30 year note.

For example:
Assuming a $200,000 loan at 5.5% fixed interest.

A 30 year note will mean you end up paying $208,808.07 in interest over the lifetime of the loan. Your first five years of interest payments are: $10,932.76, $10,780.78, $10,620.24, $10,450.64, and $10,271.47. The montly payment is $1,135.58.

A 15 year note will mean you pay $94,150.04 in interest over the lifetime of the loan. Your first five years of interest payments are: $10,779.61, $10,281.50, $9,755.30, $9,199.42, and $8,612.18. The montly payment is $1,634.17

So, for roughly $500 per month you only pay $294,150.04 for your house, versus $406,808.07 with a 30 year note. Assuming no early payoff. Even if you pay the 30 year note off 10 years early, you're still looking at around $130,000.00 in interest payments.

As for taxes, the difference is negligible between the two in terms of what you save. Assuming that the interest is the only thing you itemize (yes, I know property taxes would be itemized too, but they would be the same for both instances) and you make $55,000.00 a year. The differences in the taxes you pay for the first year is $37 for filing single. (That's using 2003 tax tables). The second year, using the same tables, the difference is $125. Third year it would be $212. Yes, as you go father out the differences become greater.

There is no huge tax savings by going to a 30 year note though. You pay more interest, and your equity builds up slower.

That's how you read it. The downside to email/posts is that the tone is left up to the reader and therefore is colored by the reader's perception of the poster. Says alot on how you perceive me, eh?

I can see how you could have read it that way, but my intent was to show what 3 extra house payments a year would do to the length of the loan. I was trying to use a practical example without actually divulging the specifics of my financial situation.

I researched mortgages and houses for a good year before I decided to go into a house, then I spent another 3 years saving for the downpayment. I don't have "lots and lots of money", I just dilligently saved and saved until I was in a position where I could afford what I wanted. My monthly house payment, excluding property tax, is actually lower than what I was paying in an apartment.

And if you get a property that's 3 or 4 units.... the other units will pay the mortgage, and then some.

My roommate/landlord owns the house I live in... it's 4 units... and he hasn't had another job since he bought it. (other than working on his dad's rental properties.)

is on slashdot today.

pfft.

Freakin slashdot poseurs.

I suggested this WEEKS ago.

Sheesh.

I'd love to own my own house someday... but.. I'm just a freshman in college.. only able to work 25 hours a week [for $6.50 an hour I get paid every two weeks] and still find time to sleep, eat,and study..

There are a couple of reasons why I'm not even *looking* at a house right now:

1: Renting means I can move when I want to. Once a year, I get the opportunity to pull up everything and move, whether that's across town, in a new town or even across state lines. I don't have to worry about the roof needing replaced. If the dishwasher breaks, I can call maintenance. I don't have to pay property taxes. I don't have to worry about the lawn and general yard maintenance. Worst case scenario would be that I have to come up with 12x monthly payment to get out of the lease.

2: I won't qualify for the best financing available. My credit isn't spotless. I'm in the finance industry, so it's obviously not total crap. I've made some mistakes in my credit history. *shrug* Unfortunately, the banks don't view "rent paid on time EVERY SINGLE MONTH" for the "LAST NINE YEARS" as being as important as the year I missed several credit card payments because, silly me, I needed to pay rent.

3: That much responsibility? Yeegs.

4: That MANY years?! I don't like signing a 2 year contract for a cellular phone...so guess how I'd feel about a 30 year loan!

5: I don't have the down payment. At all. I don't see that I'll be able to come up with 5%. Or even 1%. I've never had the kind of money to put even 500 bucks down on a CAR, much less a house!!� Houses here are averaging 350K.� Now, even if I go with something reasonable, like a condo, in the 130K range, that's, what, 6500?

6: My family would not be able to provide "gifts" to help with a down payment. They're poor. (Actually, most of 'em are...) So, I pay rent and live in apartments I like, in areas I like, and then move when I want to. I'm still youngish, so I'm not worried about it. I plug some money into my retirement funds and hope that in a few years, things might be different. :)

I live in a house. It's my dad's. He owns it. so... yeah. No.

....LOVE my new condo! Just bought in May and can't be happier!

Just realized, I haven't posted yet.
:D

I don't yet own a home... but... I think it's coming in the next few years.
What I'm trying to decide right now is if I want to start with rental property or not. It's a tough decision... the laws in MA really screw over landlords... yet, I'm fairly sure this is where I'm going to want to live.

So I guess at this point, it's not so much "am I going to buy a house soon?" as it is "am I going to enter home ownership as a business opportunity or not?"

we've owned the same house since 1987. The positive would be the tax breaks and the equity value -- especially since the current value of the house is almost triple our purchase price. The negative would be that it IS an older house (built 1927) and it does have problems, including a chronically leaking basement and some environmental issues (asbestos insulation, residue of lead paint) that we've had to address.

At the time it was a golden opportunity and we leapt for it, but next time we buy it will be newer construction and hopefully far fewer quirks/headaches.

And Starfox is absolutely right about the 15-year mortgage vs. the 30-year mortgage, if you can afford it. There also are great advantages to making even small extra payments to reduce the term of mortgage. At the time we originally financed the house we were freshly out of college, planning a wedding, and honestly couldn't afford the measly difference in payment that a fifteen-year mortgage meant. But as soon as we could we refinanced (tossing in some credit-card debt on the loan amount, since we'd already built up equity), and we round up payments every month. At this point, 3 refinances later, it looks like it will take us 24 years -- not 30 -- to pay off the house, plus all the debt we added on, and we're saving a ton on interest over that original 30-year loan, while paying off more debt than we originally had.