Do you own your primary domicile?
Do you own your primary domicile?
The U.S. national average is 67%. What is the rate of home-ownership by Bogleheads?
"What everybody else knows is not worth knowing." - Gerald M. Loeb
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Re: Do you own your primary domicile?
home ownership or mortgage ownership?pete82 wrote:The U.S. national average is 67%. What is the rate of home-ownership by Bogleheads?
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- JupiterJones
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I follow you, believe me, but technically, I think you own the house, you also have the obligation to pay back a loan, and said loan has a lien(I believe that is correct term) on the house. They do not own the house, you do. But if you cannot pay back the loan, "your" house, is forfeit to pay the loan back, in theory at least.Manbaerpig wrote:if the bank owns 55%, does that mean they own it if I'm paying the note?
Technically, it means they do. Is that the question posed here?
I am not a home-owner, the bank is the majority stakeholder
But yeah, I do not feel like I "own" my house per se yet either per se, especially when I had a home as an asset, but disregarding that, negative net worth otherwise. I always considered that the bank actually owned my house, and if I screwed up, or things went bad even without me screwing up, I would lose it. I have it near about 60 percent paid off now, when I have more money in taxable, than I have in the mortgage, I will feel like I fully "own" it then, regardless of the presence of a loan with a lien on it.
- Sunny Sarkar
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This phase of the renting side is almost always forgotten in the rent vs own comparisons. Over a period of 35 (or M+N) years, renting means 35 (or M+N) years of increasing rental payments, while owning means 30 (or M) years of fixed mortgage payments and then 5 (or N) years FREE.Jake46 wrote:Own our home. No mortgage. Sleep well at night.
"Buy-and-hold, long-term, all-market-index strategies, implemented at rock-bottom cost, are the surest of all routes to the accumulation of wealth" - John C. Bogle
The equation works fine when you don't have move within the next 35 years. My lack of a 35-year crystal ball is the primary reason why I do not want to saddle myself with six figures of debt in the form of a house. When I lose my job I do not want to have the anchor of a house dictating what jobs I can take.Sunny Sarkar wrote:This phase of the renting side is almost always forgotten in the rent vs own comparisons. Over a period of 35 (or M+N) years, renting means 35 (or M+N) years of increasing rental payments, while owning means 30 (or M) years of fixed mortgage payments and then 5 (or N) years FREE.Jake46 wrote:Own our home. No mortgage. Sleep well at night.
- Noobvestor
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Don't forget - owning means 30 (or M) years of fixed mortgage payments + 35 years of increasing compounded property taxes and insurance payments and then 5 (or N) years FREE.Sunny Sarkar wrote:This phase of the renting side is almost always forgotten in the rent vs own comparisons. Over a period of 35 (or M+N) years, renting means 35 (or M+N) years of increasing rental payments, while owning means 30 (or M) years of fixed mortgage payments and then 5 (or N) years FREE.Jake46 wrote:Own our home. No mortgage. Sleep well at night.
There is no free lunch.
We do own our modest home. I believe that the big advantage for ownership v. renting is, if the owner does stay long enough to pay off their mortgage they will, even though still paying property taxes and insurance, pay significantly less than the renter, especially if their state , like mine, gives an exemption to homeowners 65 and above. I have to admit though I have seen no studies on this.
- Noobvestor
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It also means having a highly-illiquid chunk of net worth that can prevent moving as desired, changing lifestyles to accommodate personal or professional life changes, and time/energy/stress spent worrying about things breaking that I *personally* prefer living withoutGRT2BOUTDOORS wrote:Don't forget - owning means 30 (or M) years of fixed mortgage payments + 35 years of increasing compounded property taxes and insurance payments and then 5 (or N) years FREE.Sunny Sarkar wrote:This phase of the renting side is almost always forgotten in the rent vs own comparisons. Over a period of 35 (or M+N) years, renting means 35 (or M+N) years of increasing rental payments, while owning means 30 (or M) years of fixed mortgage payments and then 5 (or N) years FREE.Jake46 wrote:Own our home. No mortgage. Sleep well at night.
There is no free lunch.
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- asset_chaos
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Yes, I own my home. Once the mortgage was paid off, I was able to start a SERIOUS investment program. The entire mortgage payment and pretax dollars go into my 401k. I voluntarily reduced my standard of living and put every spare penny into my 401k and Vanguard mutual funds. It made a huge difference in a few years.
It enabled me to make big gains by purchasing at the bottom of the Great Recession when mutual fund shares were dirt cheap.
It enabled me to make big gains by purchasing at the bottom of the Great Recession when mutual fund shares were dirt cheap.
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- TomatoTomahto
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I had a 20 year fixed rate mortgage that I paid off in a lump in year 12.GRT2BOUTDOORS wrote:Don't forget - owning means 30 (or M) years of fixed mortgage payments + 35 years of increasing compounded property taxes and insurance payments and then 5 (or N) years FREE.Sunny Sarkar wrote:This phase of the renting side is almost always forgotten in the rent vs own comparisons. Over a period of 35 (or M+N) years, renting means 35 (or M+N) years of increasing rental payments, while owning means 30 (or M) years of fixed mortgage payments and then 5 (or N) years FREE.Jake46 wrote:Own our home. No mortgage. Sleep well at night.
There is no free lunch.
Nowadays, my taxes+insurance are about 60% of what my mortgage payment (principal+interest) used to be.
- runthetrails
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My question should have been "do you have an ownership interest in your primary domicile?".
Regardless, this group has surpassed my expectations once again. The "free and clear" responses are aplenty. Great job to all of you!
This leads to my 2nd question. Anyone who owns their home outright (and reads this message board is clearly fiscally responsible but is the decision to buy the home that you live in a clear LONG-TERM financial winner?
Regardless, this group has surpassed my expectations once again. The "free and clear" responses are aplenty. Great job to all of you!
This leads to my 2nd question. Anyone who owns their home outright (and reads this message board is clearly fiscally responsible but is the decision to buy the home that you live in a clear LONG-TERM financial winner?
"What everybody else knows is not worth knowing." - Gerald M. Loeb
- TomatoTomahto
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My guess is that we will probably break even, but we have already lived happily in this home for 16 years, and expect to do so for another 5 years or so. At that point, my wife and I probably won't know what to do with the bedrooms that will (presumably) have been vacated by our kids to go to college.pete82 wrote:... is the decision to buy the home that you live in a clear LONG-TERM financial winner?
A significant factor for us is that we have renovated twice, and done so in a way that suited our family's needs without worrying about resale value. Could we have found a similar rental? Perhaps, but not very likely, and in any case, very seldom does US residential real estate come with a 20 year lease
- ruralavalon
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Owner since 1975. Free and clear since 1996. Three houses in total, one at a time.
The own vs. rent calculation will be different for individual circumstances, very different in different areas, and will always involve speculation on future maintenace costs/insurance/taxes/rental rates etc. There is no general answer to the best choice question.
The own vs. rent calculation will be different for individual circumstances, very different in different areas, and will always involve speculation on future maintenace costs/insurance/taxes/rental rates etc. There is no general answer to the best choice question.
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Our home is free of debt. We like the feeling. I do read the various posts debating whether to pay off the mortgage or not. I don't get into them. While it may be a financial question after all is said and done, my spouse and I have found it just "feels good" not to have to worry about paying off the home.
I did dodge a bullet when my wife wanted us to buy a second, winter home. It took some time but I eventually prevailed. The last thing I need in retirement is a second home 3,000 miles from my primary residence.
Rich
Cape Cod
I did dodge a bullet when my wife wanted us to buy a second, winter home. It took some time but I eventually prevailed. The last thing I need in retirement is a second home 3,000 miles from my primary residence.
Rich
Cape Cod
- JupiterJones
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A good point. But home ownership doesn't necessarily have to be an "anchor" with a payment so large that it dictates the job you take.ElJay wrote: When I lose my job I do not want to have the anchor of a house dictating what jobs I can take.
My first real estate purchase was a small, modest condo with a mortgage I could've easily covered at minimum wage if I ever lost my job. That was on purpose, because I had the same concerns as you.
JJ
"Stay on target! Stay on target!"
Well... you receive all the upside risk and almost all the downside risk to changes in your home's value. And you do whatever you want with the house, as if you already owned it outright. The only ownership-like right that the bank has is to take the house back and sell it if you stop paying them on time.Manbaerpig wrote:if the bank owns 55%, does that mean they own it if I'm paying the note?
Technically, it means they do. Is that the question posed here?
I am not a home-owner, the bank is the majority stakeholder
I don't think it makes sense to call the bank a majority stakeholder. If you were a company, they wouldn't own any of your equity, but only some bonds. If your home's value doubles, the bank won't get twice as much when you sell... only whatever was outstanding on your mortgage.
Your position fits my definition of "ownership." If you have a house worth about $200k and $80k outstanding on your mortgage, you're in the same boat as someone who has a $200k house, no mortgage, and $80k in credit card debt (other than the fact that the latter person has almost certainly managed their money horribly, and is getting eaten alive by interest, whereas you probably are doing fine).