Author Topic: The Benefits of Home Ownership?  (Read 12162 times)

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Offline Stadler

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Re: The Benefits of Home Ownership?
« Reply #280 on: February 12, 2018, 12:01:07 PM »
We just bought our second house! The home inspection is scheduled for tomorrow and then we just have to sell our house.

I've been contacted by (4) agents....two of whom I know....in the past three months asking if we'd be willing to sell our house. Apparently, the inventory for our particular price range/square footage etc. is extremely low in the St. Louis area and so we've been told that we could make some good $$.

It is tempting but we love our location, neighbors and the school system the kiddos are in so we are standing pat. But...if we were to sell at the price my buddy told me our house would most certainly sell at....we'd be staring at a $60k gain (prior to paying the costs associated with selling a home) Like I said...tempting but we've decided against it.

Selling like that is only a sound strategy if you have a fallback plan for living.   You might make $60k, but then you have to buy in that same market, AND absorb the costs of a transaction and a move.   Obviously there are too many variables in something like this to truly judge from an internet forum post, but first blush, you're right to not be greedy and/or short sighted. 

Offline gmillerdrake

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Re: The Benefits of Home Ownership?
« Reply #281 on: February 12, 2018, 12:09:03 PM »
We just bought our second house! The home inspection is scheduled for tomorrow and then we just have to sell our house.

I've been contacted by (4) agents....two of whom I know....in the past three months asking if we'd be willing to sell our house. Apparently, the inventory for our particular price range/square footage etc. is extremely low in the St. Louis area and so we've been told that we could make some good $$.

It is tempting but we love our location, neighbors and the school system the kiddos are in so we are standing pat. But...if we were to sell at the price my buddy told me our house would most certainly sell at....we'd be staring at a $60k gain (prior to paying the costs associated with selling a home) Like I said...tempting but we've decided against it.

Selling like that is only a sound strategy if you have a fallback plan for living.   You might make $60k, but then you have to buy in that same market, AND absorb the costs of a transaction and a move.   Obviously there are too many variables in something like this to truly judge from an internet forum post, but first blush, you're right to not be greedy and/or short sighted.

Those really are the reasons we've chose to stand pat Bill. It 'sounds' great but when it's all said and done the hassle involved in changing locations, schools, ancillary expenses that moves require etc etc.....it's just simply not worth it.

I mean....we'd be selling our house to try and find the same house  :lol  Plus, we've put a lot of work into it in the four years we've been there and I have a pretty neat plan to finish off our back yard living area....so, it just isn't the right call for us. But when you see the potential for big numbers like that you can get hypnotized by them easily.
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Offline jingle.boy

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Re: The Benefits of Home Ownership?
« Reply #282 on: February 12, 2018, 01:07:43 PM »
Hang tight Gary... in 10 years, you'll likely make even more of a killing when you ARE ready make that change.  jingle.kids are gonna be out of the house in less than a year, and at that point there is nothing holding us to our house/city.  The house has appreciated about 2.5x at a conservative estimate, and even if there's a "crash" in the next 12 months, we'd be down to about 2x value from what we paid - and we've only been here 16 years.

There will be another 'sellers' market in the future.
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Offline gmillerdrake

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Re: The Benefits of Home Ownership?
« Reply #283 on: February 12, 2018, 01:24:23 PM »
Hang tight Gary... in 10 years, you'll likely make even more of a killing when you ARE ready make that change.  jingle.kids are gonna be out of the house in less than a year, and at that point there is nothing holding us to our house/city.  The house has appreciated about 2.5x at a conservative estimate, and even if there's a "crash" in the next 12 months, we'd be down to about 2x value from what we paid - and we've only been here 16 years.

There will be another 'sellers' market in the future.

Yep. We were really blessed from the get go thanks to a very good decision my wife made on purchasing her first home. She bought a house in St. Louis city about three years before we met for $90k. Really nice home, had off the street parking in the back of the home....really quaint and nice starter home. Yadda Yadda Yadda few years goes by....we meet, get engaged and she decides to sell so when we get married we can find our first home together.

she ended up selling that house for $138k !!! It was spring of 2005 when she sold it....we got married in June of 05' and bought our first starter home. Fast Forward to 2008 and the housing market crash. I can almost guarantee whomever that was that bought her house....unless they are still in it.....took a major hit.
but, that chunk of change she made set us up nice on our first home and the one we have now as far as money down.
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Offline ReaperKK

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Re: The Benefits of Home Ownership?
« Reply #284 on: February 13, 2018, 05:15:01 AM »
I was analyzing my mortgage payments and wow, the interest alone paid each month is 3x the principal. Amazing



Thank goodness that 74 grand isn't a mammoth amount overall. My heart goes out to people with 200-300 thousand dollar mortgages. How in the holy hell do people handle payments like that. Damn

Our house is $279k and with insurance, taxes, PMI, and principal + interest it comes out to $1740 a month. They just built an apartment complex close to my neighborhood and a 3 bedroom 1400 sqft apartment starts at $1850 a month, I have a brand new house that's 3000 sqft. Granted there are more costs associated to having a home but the advantages (to me) having my own place far outweigh those costs.

Offline Podaar

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Re: The Benefits of Home Ownership?
« Reply #285 on: February 13, 2018, 06:37:49 AM »
I was analyzing my mortgage payments and wow, the interest alone paid each month is 3x the principal. Amazing



Thank goodness that 74 grand isn't a mammoth amount overall. My heart goes out to people with 200-300 thousand dollar mortgages. How in the holy hell do people handle payments like that. Damn

Just saw this.

The best, reasonable way, to handle interest that I've found is to make an extra payment (or two if you can) annually and have it go toward the principal only (some lending institutions will apply to the interest by default...rotten bastards). It's only truly effective if you can do it from the inception of the loan which, of course, is the most difficult time to do it. By doing that, I cut better than five years off of my 15 year mortgage. That's quite a bit of interest.

Offline lordxizor

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Re: The Benefits of Home Ownership?
« Reply #286 on: February 13, 2018, 06:45:05 AM »
Technically, you're better off taking that extra house payment and investing it in a Roth IRA instead. You don't pay your house off faster, but you get an average of 7% a year in growth as opposed to the 3-5% that your mortgage interest is, plus you can deduct your mortgage interest if you itemize deductions in your taxes. It's definitely nice to get your house paid off faster, but you'll come out ahead investing those extra payments instead.

Offline millahh

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Re: The Benefits of Home Ownership?
« Reply #287 on: February 13, 2018, 07:24:35 AM »
This conversation is doing my head in...our to-be place is $629K, ~$18K/yr in taxes, and is slightly less than 2000 ft^2.
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Re: The Benefits of Home Ownership?
« Reply #288 on: February 13, 2018, 07:29:54 AM »
This conversation is doing my head in...our to-be place is $629K, ~$18K/yr in taxes, and is slightly less than 2000 ft^2.

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Offline kaos2900

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Re: The Benefits of Home Ownership?
« Reply #289 on: February 13, 2018, 10:39:42 AM »
This conversation is doing my head in...our to-be place is $629K, ~$18K/yr in taxes, and is slightly less than 2000 ft^2.

The house we bought in a suburb of Omaha is 3700 sqft and we paid $260,000 with $5000 in taxes per year. You can get a lot of house in this City for the money compared to other cities.

Offline kaos2900

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Re: The Benefits of Home Ownership?
« Reply #290 on: April 02, 2018, 12:08:11 PM »
Our house went live at 9:30 this morning and we already have 10 showings scheduled for today! The market is crazy right now!

Offline gmillerdrake

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Re: The Benefits of Home Ownership?
« Reply #291 on: April 02, 2018, 12:13:54 PM »
Our house went live at 9:30 this morning and we already have 10 showings scheduled for today! The market is crazy right now!

 :tup    It's definitely a sellers market right now. I personally know three couples who's homes sold within days....one of which was the day they listed. Here's to hoping you guys get an offer tonight!!!
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Offline Grappler

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Re: The Benefits of Home Ownership?
« Reply #292 on: April 02, 2018, 12:34:00 PM »
This conversation is doing my head in...our to-be place is $629K, ~$18K/yr in taxes, and is slightly less than 2000 ft^2.

The house we bought in a suburb of Omaha is 3700 sqft and we paid $260,000 with $5000 in taxes per year. You can get a lot of house in this City for the money compared to other cities.

I live in Illinois and pay $6,300 in taxes for a 1,600 square foot house.   :censored

Offline ReaperKK

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Re: The Benefits of Home Ownership?
« Reply #293 on: April 02, 2018, 12:40:14 PM »
Itís nuts here in Charlotte too. One of our neighbors is selling their house because they are moving to another state and it was on the market for all of two hours.

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Re: The Benefits of Home Ownership?
« Reply #294 on: April 02, 2018, 12:45:22 PM »
We are getting new next door neighbors this month. Our neighbor sold his house....took 6 days to sell.....and the new folks are moving in on the 27th this month.

He has a pretty sweet gig actually. He's the Superintendent for the Builder who is building the homes in our subdivision. The way some of his compensation works is that he gets to build a house for cost in whichever community his company is building in.....he lives on site as the community is built....then once they are near completion he moves on to the next.

There's only (3) lots left in our subdivision so he's on to the next. He has a modest Ranch, 1600 sf with an unfinished basement that he told me he built for $215k...just cost. He sold it for $283k. He's been there for (4)  years so that's a nice close to $70k 'bonus'.  :lol 
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Offline kaos2900

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Re: The Benefits of Home Ownership?
« Reply #295 on: April 02, 2018, 01:53:33 PM »
We just got our first offer. Asking price with information only home inspection, they will beat out any offer up to $12k more than asking price!

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Re: The Benefits of Home Ownership?
« Reply #296 on: April 02, 2018, 01:58:35 PM »
We just got our first offer. Asking price with information only home inspection, they will beat out any offer up to $12k more than asking price!


Wow!!!!     :metal    That's awesome!!!
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Offline Phoenix87x

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Re: The Benefits of Home Ownership?
« Reply #297 on: April 02, 2018, 03:47:34 PM »
Damn, that was quick. Awesome
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Offline lordxizor

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Re: The Benefits of Home Ownership?
« Reply #298 on: April 03, 2018, 07:15:49 AM »
I sometimes think we should sell our house and rent for a while waiting for the inevitable correction to housing prices. Seems like things can't keep going up like they have. It feels like the mid-2000's again. Though with interest rates going up things have cooled a little. We just put a brand new roof and siding on our place (thanks hailstorm) which would help the value a bunch. We could probably walk away netting $50-60k after only 3 years in the house. But rental prices are high right now too so it's likely not worth it.

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Re: The Benefits of Home Ownership?
« Reply #299 on: April 03, 2018, 08:02:06 AM »
We just got our first offer. Asking price with information only home inspection, they will beat out any offer up to $12k more than asking price!

Damn, thats pretty awesome.

Offline Implode

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Re: The Benefits of Home Ownership?
« Reply #300 on: April 03, 2018, 09:36:16 AM »
I sometimes think we should sell our house and rent for a while waiting for the inevitable correction to housing prices. Seems like things can't keep going up like they have. It feels like the mid-2000's again.

That's something I'm worried about. I just bought a townhome, and I know it's not likely to go up in value, but it'd be nice if I didn't lose a ton of money either. I really hope I didn't buy right before a crash.

Offline gmillerdrake

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Re: The Benefits of Home Ownership?
« Reply #301 on: April 03, 2018, 09:59:15 AM »
We could probably walk away netting $50-60k after only 3 years in the house. But rental prices are high right now too so it's likely not worth it.

We're in the exact same spot as far as the amount of equity we have in our home....although we've been there 4 years. We contemplated a move, maybe a downsize but with three growing boys it just didn't seem logical. We just feel blessed that we're even in the position that we're in so we will call it even. We bought this house with the intention of staying here until at least the boys graduating high school...maybe longer, so we're gonna resist the temptation....put some effort into our house as far as yard work etc. and ride it out.
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Re: The Benefits of Home Ownership?
« Reply #302 on: April 03, 2018, 10:05:07 AM »
Since we bought our house with no money down and seller assist to help with most of the closing costs it'll be a long time till we have to worry about such things! Probably have to live there another 3-4 years worth of payments, with the extra I add in every month till we see any actual equity in the home during a sale.

However I have done several improvements to the home, so hopefully that will help keep its value up or increase it a tad.
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Offline bosk1

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Re: The Benefits of Home Ownership?
« Reply #303 on: April 03, 2018, 10:07:42 AM »
I sometimes think we should sell our house and rent for a while waiting for the inevitable correction to housing prices. Seems like things can't keep going up like they have. It feels like the mid-2000's again.

That's something I'm worried about. I just bought a townhome, and I know it's not likely to go up in value, but it'd be nice if I didn't lose a ton of money either. I really hope I didn't buy right before a crash.
I wouldn't let that worry you UNLESS you believe you are likely to move in the next five years, or if you don't have enough to really afford it in the first place.  Historically, real estate almost always goes up in the long term.  But, yeah, it's easy to get burned in the short term if you buy at a peak and then need/want to leave when you are still upside down or just haven't made enough. 

All that said, there is a lot of wisdom in this simple formula:
-Make sure you have AT LEAST 20% down.
-Make sure the P&I on a 15 year fixed (and preferably tax and insurance as well) is not more than 25% of your take home pay.

If you meet both of those and plan to stay 5 years, you probably stand to gain by buying as soon as you are ready.  If not, start saving.
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Offline Chino

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Re: The Benefits of Home Ownership?
« Reply #304 on: April 03, 2018, 10:32:17 AM »
I don't know about the generation before mine, but with people in my age bracket, 20% down is basically unheard of. Several of the people I'm close with have bought homes since I bought my first 3.5 years ago, and none of us had anywhere close to 20% to put down. I put down 4%. The number of 25-30 year olds having $35K plus just sitting in savings for a down payment is pretty low.

Offline Cool Chris

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Re: The Benefits of Home Ownership?
« Reply #305 on: April 03, 2018, 10:39:22 AM »
20% is definitely a barrier many people will find hard to achieve, but it seems like perhaps people these days are striving to purchase a home earlier in their lives than they did a generation or two ago. The younger you are, the less time you've had to accumulate enough wealth for that 20%.
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Offline bosk1

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Re: The Benefits of Home Ownership?
« Reply #306 on: April 03, 2018, 10:44:54 AM »
Of course.  But notice that I said "save."  I didn't say "find money just sitting in your savings account."  Saving is "unheard of" for a lot of people because they don't make the effort to save.  And when I say "effort," I mean things like sacrificing eating out, going to the game, going on vacation, getting that new, cool "thing," or whatever.  If you save and sacrifice like nobody's business for 3-5 years, you should be able to come up with 20% in most markets.
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Offline mikeyd23

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Re: The Benefits of Home Ownership?
« Reply #307 on: April 03, 2018, 10:46:00 AM »
I don't know about the generation before mine, but with people in my age bracket, 20% down is basically unheard of. Several of the people I'm close with have bought homes since I bought my first 3.5 years ago, and none of us had anywhere close to 20% to put down. I put down 4%. The number of 25-30 year olds having $35K plus just sitting in savings for a down payment is pretty low.

Agreed. Our generation (I'm assuming we are around the same age, I'm 28) simply does not have that kind of money sitting around, it's very rare.

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Re: The Benefits of Home Ownership?
« Reply #308 on: April 03, 2018, 10:51:16 AM »
Of course.  But notice that I said "save."  I didn't say "find money just sitting in your savings account."  Saving is "unheard of" for a lot of people because they don't make the effort to save.  And when I say "effort," I mean things like sacrificing eating out, going to the game, going on vacation, getting that new, cool "thing," or whatever.  If you save and sacrifice like nobody's business for 3-5 years, you should be able to come up with 20% in most markets.

Even if I made all the attempts in the world, the thought of saving 30,000 before age 30 would be nearly impossible. And part of it would come at a cost of paying the absolute minimum towards student loans and the like, which is barely really saving at that point. Frankly I don't know why anybody would want to save to that degree if it means a non-existent quality of life. Perhaps if you've got a well off family taking care of your schooling and living situation so that you can just work to do what you want and save as well that's practical, but otherwise, not really.
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Offline bosk1

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Re: The Benefits of Home Ownership?
« Reply #309 on: April 03, 2018, 10:57:51 AM »
I don't know about the generation before mine, but with people in my age bracket, 20% down is basically unheard of. Several of the people I'm close with have bought homes since I bought my first 3.5 years ago, and none of us had anywhere close to 20% to put down. I put down 4%. The number of 25-30 year olds having $35K plus just sitting in savings for a down payment is pretty low.

Agreed. Our generation (I'm assuming we are around the same age, I'm 28) simply does not have that kind of money sitting around, it's very rare.

I don't think ANY generation had "that kind of money sitting around."  But the difference between us and our grandparents is that they knew how to sacrifice and save so that they eventually would have that kind of money for something they really wanted.  I think too many of us nowadays want to skip right over the "save and sacrifice" part and jump right to the "having money" part.  But it doesn't work like that.

Of course.  But notice that I said "save."  I didn't say "find money just sitting in your savings account."  Saving is "unheard of" for a lot of people because they don't make the effort to save.  And when I say "effort," I mean things like sacrificing eating out, going to the game, going on vacation, getting that new, cool "thing," or whatever.  If you save and sacrifice like nobody's business for 3-5 years, you should be able to come up with 20% in most markets.

Even if I made all the attempts in the world, the thought of saving 30,000 before age 30 would be nearly impossible. And part of it would come at a cost of paying the absolute minimum towards student loans and the like, which is barely really saving at that point. Frankly I don't know why anybody would want to save to that degree if it means a non-existent quality of life. Perhaps if you've got a well off family taking care of your schooling and living situation so that you can just work to do what you want and save as well that's practical, but otherwise, not really.

Then perhaps we are too wrapped up in "quality of life" at the expense of other things?  Personally, I find it much more valuable to sacrifice "quality of life" from age 20 to 30 to find oneself debt free in one's 20s, having their home paid off by mid-40s, and having a ton of money saved up to live off of and be generous with later in life.  I can tell you that, for me personally, I'd rather keep more of my money than pay interest to a bank because I'm in debt.  But to each their own.  I'm offering the best advice I can to the one who asked above.  Your mileage may vary.
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Re: The Benefits of Home Ownership?
« Reply #310 on: April 03, 2018, 11:06:56 AM »

Even if I made all the attempts in the world, the thought of saving 30,000 before age 30 would be nearly impossible. And part of it would come at a cost of paying the absolute minimum towards student loans and the like, which is barely really saving at that point. Frankly I don't know why anybody would want to save to that degree if it means a non-existent quality of life. Perhaps if you've got a well off family taking care of your schooling and living situation so that you can just work to do what you want and save as well that's practical, but otherwise, not really.

My wife and I did.  We had our car loans, her student loans, and our apartment rent, plus other expenses (gas, renters/auto insurance, cell phone bills, cable bill etc.) over our heads, and we were working our first jobs out of college, so we weren't' really making a ton of money yet.  We had a goal of getting married and buying a home, so we SAVED.  She diverted a portion of her paycheck to the savings account, so twice a month, it was automatically saved.  Our tax returns were not spent on junk each spring.  We would take about $1,500 max (usually less) and take a trip to the beach or Vegas, but the rest was put the bank and saved.  If we received money as a gift, it went into the bank.  I had a mutual fund that my mom had started for me, where I contributed money from the age of 22 to the age of 28 and doubled my contributed money over that time.  When the recession hit in 2008, Bush gave everyone $600 to "stimulate the economy" on their tax return.  Guess what I did?  I used that $600 to pay off my car loan.  I didn't go buy a tv.

Sure, we took a trip once a year, or ate out on occasion.  But we found a way to make things work for us.  We had an affordable apartment that was nice, but not too much money for us (i.e. I'm not keeping up with the Jonses and moving into the city to pay more money to rent an apartment just to say I live in "the city").  Having the dual income was tremendous, but it was up to both of us to not live so extravagantly.

We got married in May one year and in June we put 10% down on a $200,000 home.  So in three years, we had saved $26,000 for a home.

It is possible - but bosk is right.  You can't have EVERYTHING and expect to save.  We didn't have smartphones (iphones had just come out then), we didn't travel the world like my other college friends started doing, we lived within our means and put every dollar we could into saving...while still being able to enjoy our lives without going overboard. 

After 7 years of owning a home, we were able to refinance and had just enough equity to remove the PMI from our mortgage and get into a lower interest rate.  Now, with her quitting work to be a stay at home mom, we're back in the same boat - cutting back on the lifestyle and hobbies to ensure that we have enough money for our home and family's necessities.

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Re: The Benefits of Home Ownership?
« Reply #311 on: April 03, 2018, 11:16:52 AM »
No judgment here - I certainly don't have the discipline I wish I did when  it came to this stuff - but times are different.  I'm 50.  When I was 22, and fresh out of school, I had a car payment, car insurance, a rent payment, utilities, and that's it.  No subscriptions, no cell phones, no Spotify, no massive cable bill, no internet, no security system, no Sirius Satellite Radio...  I think we lose sight of how quickly "$14.99 a month" adds up to suck a ton of money out of our shorts every month. 

Offline bosk1

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Re: The Benefits of Home Ownership?
« Reply #312 on: April 03, 2018, 11:27:34 AM »
No judgment here - I certainly don't have the discipline I wish I did when  it came to this stuff - but times are different.  I'm 50.  When I was 22, and fresh out of school, I had a car payment, car insurance, a rent payment, utilities, and that's it.  No subscriptions, no cell phones, no Spotify, no massive cable bill, no internet, no security system, no Sirius Satellite Radio...  I think we lose sight of how quickly "$14.99 a month" adds up to suck a ton of money out of our shorts every month. 

Well, sure.  But a lot of those things you mention can be eliminated.  And, with all due respect, when one is younger is exactly the time to build that discipline.  Rather than having a car payment at 22, for example, one can instead pay cash for a beater that looks like garbage but runs and gets you from point A to point B.  An extra part time job in the evenings for 3-6 months will get you a car, which saves you that $300-$400 (or whatever) car payment every month (and probably lowers the insurance significantly to boot).  And other than cell phone and Internet, none of those other items you mention are essential either.  Again, it's all about prioritizing what you want.  But even if one isn't saving for a house, I would still submit that learning financial discipline as young as possible is incredibly valuable and leads to a lot more financial opportunities later.  I wish I had done better at it when I was younger, because although I think we are doing pretty well right now, we could be miles ahead if we had had some better advice and applied ourselves a bit differently.
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Offline kaos2900

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Re: The Benefits of Home Ownership?
« Reply #313 on: April 03, 2018, 11:29:08 AM »
We ended up with 14 showings and got 7 offers. We ended up accepting an offer that was originally asking price with an escalating clause where they would beat any bid by $1000 up to $12k more than asking price, no closing costs, and an informational only home inspection. We ended up getting $9k more than asking price.  :metal

Offline bosk1

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Re: The Benefits of Home Ownership?
« Reply #314 on: April 03, 2018, 11:29:57 AM »
Nice!  Congrats!
"The Supreme Court of the United States has descended from the disciplined legal reasoning of John Marshall and Joseph Story to the mystical aphorisms of the fortune cookie."