Quote:
Originally Posted by jayswin
Also, too many new homeowners treat homes the same way they treat new vehicles. "I want all the options and I want to customize everything to fit my needs!!!!".
"A non new home in a 30 year old community? Bleccccchh! Take me 50 minutes away from downtown in a cookie cutter, small square footage NEW BUILD where I get all the CONTROL over OPTIONS! for $450-$550k.
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I think a new home is a better financial decision for a person starting out. My house was built in 1969 and in the 10 years I've lived there we've pumped a lot of money into it. Definitely a ton of it has been optional, but some things like windows, attic insulation, new roof, new electrical panel, hot water tank, etc. couldn't not be done.
I had a new house for five or six years before this one. It was great because there were not any maintenance surprises at all. Just paid my mortgage and that was it. We put up a fence, planted some trees and laid sod, but honestly, that's a drop in the bucket compared to maintaining an older house, plus I've had to replace the fence at the house I'm in now, too (and the sod, but again, optional).
Quote:
Originally Posted by Enoch Root
What matters is the monthly mtge payment, not the house price.
According to the BOC, mtge rates in 1985 were 11.75%. So a 5 yr fixed gives you a mtge payment of $757. For today's $450,000 house, at 2.59%, the mtge payment is $1,799. Much closer to the change in inflation.
Also, with today's lower interest rates, a larger portion of your payment is going towards the principal, meaning you are saving more. On average, 69% of what you pay goes to paying the principal and building equity. In 1985, only 28% of your money, on average, went to equity (and 72% of it was interest).
So the real cost of housing is not all that different. In fact, today's environment is arguably more advantageous.
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Are you joking? Of course it matters. There's your monthly liability, but also your term length. There's an insane difference between paying off your mortgage at 45 and paying it off at 60. All that money in interest (let alone principle) could be in your retirement fund. Plus the emotional burden of it.