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bxgrl,
I was a renter until a year ago. So you’ll get no sniping from me. In fact until I got married and became a two income household I most likely wouldn’t have been able to own my own home.
To answer your question yes, when I grew up it was instilled in me that home ownership was the smartest thing you could do financially. My folks bought and completely paid off the mortgages for their home, my grandmother’s condo and a large plot of land in 20 yrs. They had both grew up quite poor so to them home ownership was a marker of success.
A few years ago they sold the land and using the proceeds, bought a beachfront plot up on a bluff in VA and a new construction house across the street to live there while they built their dream home on the beachfront side. This was cash, no mortgage. They then went and sold the house we grew up in and are going to be selling my grandmother’s place. That’s a bulk of their retirement money.
So based on what they’ve been able to do yeah, I am pretty confident that the decision to buy will work out well for me in the end.
The biggest lesson they taught me. Always live slightly below your means. The Jones’? They’re probably leveraged to the hilt.
I wonder if anyone else heard the BBC World Service feature this morning about a Danish artist’s group exhibition in Berlin. Its topic bears a striking resemblance to certain Brownstoner posters: the world economic crisis, seen through the eyes of a glum character named Moll Morgengrau. He views the financial crisis with glee, exclaiming “More financial crisis please! Now everyone will be just as poor as me!†or “The financial crisis is wonderful! Now everyone is getting divorced!â€
Unfortunately, cannot find audio link; Bloomberg and AP links at: art2u.wordpress.com/
“Mortgage interest is a deductible financial cost.”
It’s like still having to pay $200 for a $400-italian cashmere scarf on sale for 50% off. It doesn’t wipe out the net cost. This net cost has to be deducted from your gross return. Edumacate me more, DIBS (Really, maybe I’m missing something).
christopher, you’re correct. However, where my parents lived (different country) they didn’t have the tax breaks provided in the US, such as the mortgage interest deduction. As such, it made sense there to pay off your mortgage as quickly as possible (or avoid having one at all if you could).
If you own a multi-family building the mortgage gets you the deduction against the income. Once a multi-family is paid off your tax liability skyrockets.
After a few years of free and clear ownership my folks were getting hammered at tax time so they did a small re-fi for the tax benefits.
Of course this only really works on multi-family properties and doesn’t apply to apartments and single family houses….
I wonder how many people buy simply becuase we are told to believe that you must- for financial, social, moral, religious- I don’t know how many reasons. I do know that there is a disturbing tendiency to treat those of us who rent as somehow less productive/intelligent/solvent/ educated- you name it, its been implied about people who rent.
I’m under no illusions about the financial benefits of owning a house. But it isn’t the only financially responsible choice you can make. And for all the sniping at renters, it’s a little ironic isn’t it, that so many homeowners depend on tenants to meet their mortgages.
bxgrl,
I was a renter until a year ago. So you’ll get no sniping from me. In fact until I got married and became a two income household I most likely wouldn’t have been able to own my own home.
To answer your question yes, when I grew up it was instilled in me that home ownership was the smartest thing you could do financially. My folks bought and completely paid off the mortgages for their home, my grandmother’s condo and a large plot of land in 20 yrs. They had both grew up quite poor so to them home ownership was a marker of success.
A few years ago they sold the land and using the proceeds, bought a beachfront plot up on a bluff in VA and a new construction house across the street to live there while they built their dream home on the beachfront side. This was cash, no mortgage. They then went and sold the house we grew up in and are going to be selling my grandmother’s place. That’s a bulk of their retirement money.
So based on what they’ve been able to do yeah, I am pretty confident that the decision to buy will work out well for me in the end.
The biggest lesson they taught me. Always live slightly below your means. The Jones’? They’re probably leveraged to the hilt.
Hey Benson, quit copping my material!
😉
I wonder if anyone else heard the BBC World Service feature this morning about a Danish artist’s group exhibition in Berlin. Its topic bears a striking resemblance to certain Brownstoner posters: the world economic crisis, seen through the eyes of a glum character named Moll Morgengrau. He views the financial crisis with glee, exclaiming “More financial crisis please! Now everyone will be just as poor as me!†or “The financial crisis is wonderful! Now everyone is getting divorced!â€
Unfortunately, cannot find audio link; Bloomberg and AP links at: art2u.wordpress.com/
—crickets chirping —–
“Mortgage interest is a deductible financial cost.”
It’s like still having to pay $200 for a $400-italian cashmere scarf on sale for 50% off. It doesn’t wipe out the net cost. This net cost has to be deducted from your gross return. Edumacate me more, DIBS (Really, maybe I’m missing something).
***Bid half off peak comps***
“A mortgage isn’t always a bad thing to have.”
christopher, you’re correct. However, where my parents lived (different country) they didn’t have the tax breaks provided in the US, such as the mortgage interest deduction. As such, it made sense there to pay off your mortgage as quickly as possible (or avoid having one at all if you could).
“Thanks for being honest for once about the double identity thing though.”
Your welcome, wasder. But why does my nose hurt?
***Bid half off peak comps***
A mortgage isn’t always a bad thing to have.
If you own a multi-family building the mortgage gets you the deduction against the income. Once a multi-family is paid off your tax liability skyrockets.
After a few years of free and clear ownership my folks were getting hammered at tax time so they did a small re-fi for the tax benefits.
Of course this only really works on multi-family properties and doesn’t apply to apartments and single family houses….
I wonder how many people buy simply becuase we are told to believe that you must- for financial, social, moral, religious- I don’t know how many reasons. I do know that there is a disturbing tendiency to treat those of us who rent as somehow less productive/intelligent/solvent/ educated- you name it, its been implied about people who rent.
I’m under no illusions about the financial benefits of owning a house. But it isn’t the only financially responsible choice you can make. And for all the sniping at renters, it’s a little ironic isn’t it, that so many homeowners depend on tenants to meet their mortgages.