What am I missing here? [I'm a bachelor]

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
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Re: What am I missing here? [I'm a bachelor]

Post by Cosmo » Sat Jul 15, 2017 12:43 pm

jalbert wrote:Yes. What you would pay in nominal terms over 30 years if you kept the house that long and paid off the loan is not a very informative comparison to current rent. If inflation stays positive, the loan payment is decreasing in real terms over time. The homeowner's mortgage deduction from taxable income is another wrinkle.
My parents sold their home in NE Ohio in the early 2000s for $240K. The home was built in in 1968. Their 360th and final mortgage payment of $162 was in 1998.

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Re: What am I missing here? [I'm a bachelor]

Post by tj » Sat Jul 15, 2017 1:59 pm

Keepcalm wrote:Looked at a house today, $240,000 with a 30 year fixed at 3.75% APR I will pay $270,000 in interest/$510,000 total principle+interest at the end of the 30 years.

Add in all the home maintenance, and the taxes.

This is why I rent. I have no kids, no wife. Don't need it.

The white picket fence American dream is a bunch of hog wash propoganda.

Am I missing an angle here?
Why would you need a $240k house for just you?

I bought a 1 bedroom cooperative apartment for $46,000. I paid cash. I pay $230 per month in monthly dues which includes building insurance, water, sewer, trash, property taxes and reserve savings. The cooperative covers water heater and HVAC replacement. It is well funded. I will easily break even vs the cost of renting after 3 or 4 years.

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