The Great Debate....Mortgages
- Thread starter AdHustler
- Start date
My take in today's housing market I feel like buying a house is more like buying/financing a car. Sure there isn't the depreciation like a vehicle, but you're still using credit to purchase something you can't exactly afford. On top of all the money you'll pay in interest on a typical 30yr
If I was settled in with a wife, kids, etc. I could justify wanting to buy a nice house, in a good neighborhood, school district, a place to fix and customize to my liking, etc; and view it as a worthwhile expense/luxury.
For now I'm young, single, and the ability to be mobile is nice. Not to mention I live in one of the nicest historic neighborhoods in the city, and I couldn't buy a home in this neighborhood and pay less. (most homes are very large and $400K-1mil+) and it's a high flood risk area so I'm sure getting flood insurance is difficult or stupid expensive.
If it's just a matter of using a mortgage to allow for more free capital to invest you're still leveraging yourself. Not that leverage in a business sense is bad such as using a credit card for campaign cash flow, but if I could afford a house I wanted I'd rather lay out the cash.
If I was settled in with a wife, kids, etc. I could justify wanting to buy a nice house, in a good neighborhood, school district, a place to fix and customize to my liking, etc; and view it as a worthwhile expense/luxury.
For now I'm young, single, and the ability to be mobile is nice. Not to mention I live in one of the nicest historic neighborhoods in the city, and I couldn't buy a home in this neighborhood and pay less. (most homes are very large and $400K-1mil+) and it's a high flood risk area so I'm sure getting flood insurance is difficult or stupid expensive.
If it's just a matter of using a mortgage to allow for more free capital to invest you're still leveraging yourself. Not that leverage in a business sense is bad such as using a credit card for campaign cash flow, but if I could afford a house I wanted I'd rather lay out the cash.
Hell if you live in So Cal, there's no way you're buying much of a house without a mortgage. The house we live in now, we purchased at the height of the market, however we also sold our previous home at the height, so it's pretty much a wash.
Nothing wrong with the right mortgage in my opinion, but a word to the wise. Pay as much extra to principal each month as you can afford. You'll be amazed at what an extra $500 or $1000 per month will do to shorten your term, and save you tens of thousands in interest.
Don't over extend yourself though. Buy a house you can afford. Make damn sure you have 6 months mortgage payments saved up in the bank in case your nifty PPC campaign takes a shit or the next Google Python update puts you back in the stone age.
Nothing wrong with the right mortgage in my opinion, but a word to the wise. Pay as much extra to principal each month as you can afford. You'll be amazed at what an extra $500 or $1000 per month will do to shorten your term, and save you tens of thousands in interest.
Don't over extend yourself though. Buy a house you can afford. Make damn sure you have 6 months mortgage payments saved up in the bank in case your nifty PPC campaign takes a shit or the next Google Python update puts you back in the stone age.
It comes down to how over inflated the property values still are where you are thinking of buying. I live in a $175k home that I paid $135k for 2years ago that Is about 130% median home value here in my county. My mortgage payment is only $840 a month including escrow. I would have been retarded to throw away my money on rent.
Need about $500g's here unless I want to live in a cardboard box. If I could buy a decent house for $175k i'd do it in a heartbeat.
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Just get a solid umbrella liability policy to deal with the lawsuit issue. Last I checked $1mm of coverage was in the ballpark of $400-$600/year. That will be cheaper in almost all cases in lieu of keeping a mortgage around.
That won't work for real estate held in the US...judges don't care whether your U.S.-based home is held by a foreign entity, they'll still take it to satisfy a judgment all day long.
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My $0.02 - a mortgage = risk (with the risk being that I experience a job loss, bad inboxing streak w/emails, low CTR on landers, bad leads for the call center, etc. and don't have the cash to handle the payments). I am ok w/certain risks, but not one that puts my kids and wife on the street if I hit a bad streak...
I don't really understand it completely, and I'm certainly no lawyer, but my understanding is that all of the assets you put into the trust are protected in case you like, you know, run over an entire family and they sue you or something. The assets belong to the trust, not to you. You are just the person who has access to the trust.
It's expensive to set up but probably well worth it if you have a lot of assets.
It said didn't read, not couldn't read. Did you fail the comprehension part of your fancy reading/writting courses?
There are two types of trusts: revocable and irrevocable. You are referring to the irrevocable type.
Fair enough. I completely agree, this should come first and foremost for literally everyone in this thread. However, at some point your cash on hand surpasses the demand for investment by your business. Yes, you should be constantly scaling, diversifying, and grinding but traditional and safe investments are important also right?
If you fit into the above scenario, this is where I see the mortgage decision falling. Can you out-perform your mortgage interest rate with passive or interest income. If not, pay off your house?
And if anyone has a safe way of earning more than 5% passively feel free to share the riches!
Ps. Already setup on Lending Club but I am not convinced enough to make large deposits yet.
didin't read eveyrthing but i've thought about this for a good amount of time.
My conclusion - it depends on your situtation.
Personally, i would never pay cash. it doesn't make sense unless ur a complete ballaholic that can pay the house in cash in 1 month.
But if your like 99% of people, who might still make good incomes 100, 150, 200, 250k+ per year, just fucking pay a mortgage.
You always want to leverage ur cash IMO, so if you can afford a 250k house in cash, then that means u can put a downpayment on a house worth 1.2 mil assuming you can afford the payments.
Buying in cash is throwing away money IMO, unless u can make that back in a month or so.
My conclusion - it depends on your situtation.
Personally, i would never pay cash. it doesn't make sense unless ur a complete ballaholic that can pay the house in cash in 1 month.
But if your like 99% of people, who might still make good incomes 100, 150, 200, 250k+ per year, just fucking pay a mortgage.
You always want to leverage ur cash IMO, so if you can afford a 250k house in cash, then that means u can put a downpayment on a house worth 1.2 mil assuming you can afford the payments.
Buying in cash is throwing away money IMO, unless u can make that back in a month or so.