Quote:
Originally Posted by Phanuthier
Actually, I disagree with that. Buying a property is an investment - at a 30 year mortgage, your liability is that you hold a debt on an investment for 30 years. Are you trying to say its more responsible to commit to a 30 year debt on a property you do not expect to hold a liability for over the duration of the 30 years?
I know people move before their mortgage is up, but the way I view your risk is over the term of the liability. The irresponsiblity of expecting to hold a property shorter then the term (well, the sub-prime anyways) done by, well, baby-boomers is the reason for the 2008 recession that severly hurt a lot of people coming out of school who are in the 25-30 year old range - the range of people that is being critisized for having too easy of a life.
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In Canada it's different Phan. It's best to buy mortgages in 5-year installments with the option to pay a lumpsum after each year. Then renew your mortgage for another 5 years.
I'm willing to bet that if East Coast Flame bought a crappy 150K condo right now with 15K down. Has a mortgage of $800-1000/month and save up enough money to pay a lumpsum at the end of each year, he could pay that house off in 10 years. I've done it myself.
Then at that point, he may have gotten married, had a kid etc.. then he needs a bigger house. If he finds a 2nd income, this is even easier to do.
Even if the house hasn't gone up (which it probably has at least a little just based on Cost of Living). He can sell that house for 150K and use that as the down payment for his new 500K house at the age of 34ish. I'm at this stage now, I'm 34
