Exactly. (Reply #85) - Democratic Underground

In the discussion thread: Is Buying a House Still the Best Way to Build Wealth? [View all]

Mon Feb 9, 2015, 06:07 PM

Adrahil (13,340 posts)

85. Exactly.

Since a mortgage is a long term commitment, you do have to consider employment stability before taking on such a commitment. Likewise, you shouldn't use equity as an ATM except in emergencies.

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100 replies	Author	Time	Post
Is Buying a House Still the Best Way to Build Wealth? [View all]	xchrom	Feb 2015	OP
to build wealth for the lender from the thousands of almost pure interest payments.	Sunlei	Feb 2015	#1
As to opposed to enriching your landlord?	Adrahil	Feb 2015	#9
mortgages are front loaded for interest. the majority of the first many years are interest payments.	Sunlei	Feb 2015	#13
Yes.. I agree.	Adrahil	Feb 2015	#18
very similar to what I did. pay very heavy towards the equity.	Sunlei	Feb 2015	#22
Yeah, we did that too, and now own the house outright in retirement. It	Nay	Feb 2015	#32
Exactly.	Adrahil	Feb 2015	#85
Renting is not throwing money away	tabbycat31	Feb 2015	#63
There is a way to really cut the interest you pay, on a conventional loan.	dixiegrrrrl	Feb 2015	#41
did that but put no money down at all. Lenders handed out mortgages like candy & I took advantage!	Sunlei	Feb 2015	#54
Save, put down a big down payment, and pay on the principal every month.	MADem	Feb 2015	#52
If you get a 30 year mortgage	mythology	Feb 2015	#58
My adorable mom told me the secret was "Buy low, sell high."	merrily	Feb 2015	#2
We got very lucky...sort of...	Phentex	Feb 2015	#20
I'm glad you got a good deal. The neighborhood would have changed either way, so it's good	merrily	Feb 2015	#23
lol	Lurker Deluxe	Feb 2015	#3
"Interest only" loans do have a purpose....	Adrahil	Feb 2015	#10
It prevented them from pulling any equity out of the house?	FBaggins	Feb 2015	#4
They would have had no equity with that price drop even if they had put 20% down.	Gormy Cuss	Feb 2015	#24
Yeah....I don't think 10% is enough down for most people....	pipoman	Feb 2015	#5
The actual value of the "start home" is irrerlevant...	Adrahil	Feb 2015	#11
I've been in LA, It doesn't cost $500k to live within 30 miles	pipoman	Feb 2015	#34
I don't disagree that some feel that way...	Adrahil	Feb 2015	#46
I've spent a lot of time in N. San Diego County, my son lived there 5 years	pipoman	Feb 2015	#48
California is tough.	Adrahil	Feb 2015	#70
Maybe if you mean "city" as the greater LA area.	jeff47	Feb 2015	#82
Perfect call. n/t	FSogol	Feb 2015	#16
It was a little crude..see 34 above. .nt	pipoman	Feb 2015	#39
Shelter is another thing that is a basic human right and should not be	libtodeath	Feb 2015	#6
Maybe	yeoman6987	Feb 2015	#8
They fail to mention the money pit that a house is	tabbycat31	Feb 2015	#7
Speaking as both a homeowner and a landlord	whatthehey	Feb 2015	#12
It's peace of mind to me	tabbycat31	Feb 2015	#17
Consider a nice travel trailer and 'live' where ever you choose to park.	Sunlei	Feb 2015	#28
Do you have experience with that?	WorseBeforeBetter	Feb 2015	#35
I wouldn't sell a home that is paid for. Rent it for retirement or general income.	Sunlei	Feb 2015	#42
My mothers' next-door-neighbors sold their home...	WorseBeforeBetter	Feb 2015	#49
The money your parents spend on their home falls into 2 categories	pipoman	Feb 2015	#44
I agree	Johonny	Feb 2015	#21
Maybe a condo?	pangaia	Feb 2015	#57
So far, I've made $20k in the last two years on my house.	jeff47	Feb 2015	#88
You could sell that house and make 20K	Johonny	Feb 2015	#97
Markets don't go up evenly.	jeff47	Feb 2015	#98
Yes, I prefer not to have to deal with that stuff.	alarimer	Feb 2015	#27
Five Figures a YEAR?	Adrahil	Feb 2015	#47
I don't care that I have nothing to show for rent	tabbycat31	Feb 2015	#64
Hey, it's your money... flush it down the crapper if you wanna....	Adrahil	Feb 2015	#65
Thanks for proving my example	tabbycat31	Feb 2015	#71
Who said you are second class citizens?	Adrahil	Feb 2015	#72
We'll agree to disagree.	tabbycat31	Feb 2015	#75
Cheers!	Adrahil	Feb 2015	#79
Renting is great	PasadenaTrudy	Feb 2015	#94
Thank you. "They fail to mention the money pit that a house is"	raccoon	Feb 2015	#60
It was in the 40s through the 80s	treestar	Feb 2015	#14
I think it really depends on how you buy the house	bhikkhu	Feb 2015	#15
Agreed	tammywammy	Feb 2015	#19
The strategic reason to buy property with interest-only loans is that you don't tie up your cash	Gormy Cuss	Feb 2015	#26
I suppose if you have cash to invest elsewhere, buying or renting is neutral	bhikkhu	Feb 2015	#43
That's the approach we took -	TBF	Feb 2015	#61
That loan product was designed for people with money to invest elsewhere.	Gormy Cuss	Feb 2015	#83
I believe it is a still a pretty good way	rock	Feb 2015	#25
I agree!	Red State Rebel	Feb 2015	#30
no it is not. The best way	guillaumeb	Feb 2015	#29
It is still the best way, they are not making any more land. Well they are but not on that large of	ChosenUnWisely	Feb 2015	#31
Little boxes on the hillside, little boxes made of ticky tacky...	WorseBeforeBetter	Feb 2015	#33
like everything else the housing market's been "financialized": suburbs aren't built for housing for	MisterP	Feb 2015	#55
The point of a house is shelter; a roof over your head.	lumberjack_jeff	Feb 2015	#36
Homes are a place to live	edhopper	Feb 2015	#37
Here's a "starter" type home in my town....	PasadenaTrudy	Feb 2015	#38
Holy shit. And I thought Northern Virginia was bad.	WorseBeforeBetter	Feb 2015	#50
SoCal is prime	PasadenaTrudy	Feb 2015	#67
LOL Well I moved to Raleigh...	WorseBeforeBetter	Feb 2015	#73
Wow!	PasadenaTrudy	Feb 2015	#78
Aaaah, wonderful town. (n/t)	WorseBeforeBetter	Feb 2015	#86
A "starter" type home for 3 quarters of a million dollars	Art_from_Ark	Feb 2015	#95
Renting has been great for my brother...	PasadenaTrudy	Feb 2015	#40
Renting is great in cities with rent control, I guess.	MADem	Feb 2015	#53
They've been there	PasadenaTrudy	Feb 2015	#66
If they're at that kind of place in their lives where they can manage to do that without issue, then	MADem	Feb 2015	#68
We are a Childfree family	PasadenaTrudy	Feb 2015	#77
Stocks are the best way to build wealth	Augustus	Feb 2015	#45
It is the only hedge on inflation most people need...	pipoman	Feb 2015	#59
I agree... a house is not the BEST way to build wealth...	Adrahil	Feb 2015	#80
Yes and no	FBaggins	Feb 2015	#99
There really are so many factors that can weigh heavily for, or against, buying a home	Lex	Feb 2015	#51
This message was self-deleted by its author	olddots	Feb 2015	#56
It never was the best way to build wealth NT	fxstc	Feb 2015	#62
starter home = $490K, wow.....	steve2470	Feb 2015	#69
It was in Los Angeles - that probably was about as cheap as you'd find	Matariki	Feb 2015	#93
A home is not an investment, it's a constant cost.	dilby	Feb 2015	#74
If you're renting, you can;t even break even, of course.	Adrahil	Feb 2015	#81
That is very true, but you are not responsible for maintenance.	dilby	Feb 2015	#84
Well, you still PAY for maintenance, make no mistake.	Adrahil	Feb 2015	#87
I got screwed. It was the worst financial decision I ever made.	iscooterliberally	Feb 2015	#76
Thank you for sharing your experience. This is a keeper:	raccoon	Feb 2015	#100
Too many factors and variables	madville	Feb 2015	#89
Probably is at least an effective defense against poverty in old age...If you can pay it off	TheKentuckian	Feb 2015	#90
It all depends on the circumstances. We encouraged our daughter and son-in-law to buy	pnwmom	Feb 2015	#91
How is home owership supposed to make up for "dwindling pensions and stagnant wages"	Matariki	Feb 2015	#92
I bought a	lancer78	Feb 2015	#96

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