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Featured Mortgage, to be or not to be?

Discussion in 'Christian Advice' started by Willing-heart, Apr 1, 2018.

  1. Yes

    14 vote(s)
    73.7%
  2. No

    5 vote(s)
    26.3%
  1. Willing-heart

    Willing-heart In Christ Alone. Supporter

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    Everyone I've spoken to seems to think that a mortgage is a good investment for a Christian. Is there such a thing as a good debt? If Christ died to free us from the debt of sin, won’t He desire that our choices do not enslave is to any kind of debt? Especially a financial one which is often quite burdensome? Would it make sense to be enslaved to a lender especially one that you cannot 100% guarantee to fully pay back? I do not desire to store up treasure on earth but yeah I cannot fully understand why anyone would take out a mortgage, and the truth is that most people are living outside of their means cos they cannot really afford to buy a house in this tough economy. Anyway, I would appreciate some biblical advice on this subject. God bless
     
    Last edited: Apr 1, 2018
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  2. Netgear

    Netgear A Dog On A Mission

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    Mortgage for some, is the only way to get on the property ladder. One must remember to pay your debters. Whatever is owed must be paid back.
     
  3. Ancient of Days

    Ancient of Days Well-Known Member Supporter

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    You could also add in that buying a home is NOT an asset. Its a liability. Assets bring in money liability's cost money. Even after the lender is paid back the house is still a liability unless you rent out the property.
     
  4. Willing-heart

    Willing-heart In Christ Alone. Supporter

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    The bible says that, "where your treasure is, there your heart will also be." What most people forget is that houses are just made of wood, but if there is love in a house, it's a palace for sure. The more I look into the subject, the more I'm convinced that it is not what God has in mind for us.
     
  5. Netgear

    Netgear A Dog On A Mission

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    We all need a roof over our head. A home.
     
  6. MichaelEric

    MichaelEric New Member

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    A mortgage is simply a loan that allows you to purchase a home that you will pay for long-term. You don't become a slave to the lenders as long as you purchase within your means. A slave has no option. A responsible mortgagor can sell and move on any time they like.
     
  7. miamited

    miamited Ted Supporter

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    Hi willing heart,

    We all have to live somewhere. The only options in this life, as far as where any of us will lay our heads down at night are: 1. sleep under a bridge. 2. pay rent to a landlord. 3 purchase a home, and unless one is fairly wealthy, that can only be accomplished through a mortgage instrument.

    Let's look at number one. Yes, you are indebted to no one as far as owing any money. But you are depending on the largess of others who have provided or built the place where you're going to lay your head each night unless you live out in the woods or wilderness somewhere. That might work for some folks, but it is tough to get a hot shower and a good meal each morning so that you can kiss the kids off to school and head to work yourself. Now, you can certainly live completely off the grid, but in looking at the examples of believers in the new covenant writings, that doesn't seem to be the way that Jesus expected people to live.

    Number 2. You can rent a home for your family and this does work for millions of Americans, but now you're back to owing someone money each month to have that place you call home for your family.

    Number 3. You can purchase a home with a large portion of money that you have saved up and be just as dependable to pay the mortgage holder his 'rent' each month as you are to pay the landlord his rent each month. But in the end, with number 3, you are working to free yourself from owing anyone for the roof over your head. However, you will always pay taxes to the governing authorities for the piece of property that you call your home. But you also pay taxes to the governing authorities for the piece of property that you may rent. You just don't pay it to them directly.

    Despite those who would teach that a believer should not be in debt, I'm not sure that's what God's word teaches about debt. The Scriptures say to 'owe no man nothing...' However, a mortgage is an agreement and so long as you pay as the agreement demands, then you don't really owe anyone as I believe God is asking us not to owe. If you go past due on your mortgage or any other agreed upon payment that you and another party have entered into an agreement concerning -- then you owe.

    So, I'm not completely sure that the Scriptures mean to tell us that we shouldn't provide a roof over the heads of our family. In this day and age, 99% of us wouldn't be able to do that without owing someone. Either a landlord or a mortgage holder.

    If one truly seeks financial freedom, then they'll buy their home and work to retire the mortgage.

    BTW, the Scriptures don't say that Jesus died to free us from 'all kinds' of debt. The Scriptures say that Jesus died to free us from the debt of sin which we owe to God.

    God bless,
    In Christ, ted
     
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  8. Albion

    Albion Facilitator

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    Quite right. A mortgage is an investment, not a liability. Even before the mortgage is paid off, you can sell the property. So the question simply is whether the value of the home will appreciate over the life of the loan or depreciate.

    There was a period about a decade ago when homeowners were stung by declining prices, but generally values have risen, meaning that it's probably a good investment and one in which someone else is putting up the cash so that you can make this investment.
     
  9. dreadnought

    dreadnought Lip service isn't really service. Supporter

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    I don't think you can equate the Lord's dying on the cross to free us of debt and a mortgage. You just have to decide whether or not you can afford the place. I never owned a place until a couple of months ago (I'm 65), and then I bought a small condo, cash. My landlord really gave me no choice.
     
  10. Willing-heart

    Willing-heart In Christ Alone. Supporter

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    Thanks for both your correction. Yes you are right that Christ died to free us from our sins, not our bank debt. But what I'm trying to say is that if God came to free us from sin, which is a big burden, won't he desire that we live a debt free life from all things we are slaves too like being in financial debt?
     
  11. Tree of Life

    Tree of Life Hide The Pain

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    Once you own the house the house is actually an asset. It's worth a chunk of money and could be sold.
     
  12. dreadnought

    dreadnought Lip service isn't really service. Supporter

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    I never bought a place till recently because I wasn't sure I could make the payments. I only bought a place recently because rent was getting so high, my neighbor was so unpleasant, and they were making me sign a one-year lease for the first time. I was able to buy a small condo for cash.
     
  13. Haipule

    Haipule Well-Known Member

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    I have bought and sold 4 pieces(three on Maui) of property and two of them I built. Dude! Did I make a lot of money!

    I lived in each property for at least 2yrs and 1 day so all of the capital gains were tax FREE! I did most before the crash of 9/29/2008. The last one was in South Florida: I bought the house in 2014--$185.000, and sold it 2yrs and one day+ in 2016--$227.000--tax free.

    I am a follower of Jesus my Shepherd and it was all His crazy ideas! I had no idea what He was doing and therefore, had no idea what I was doing or, why!

    However, I always ended up and the perfect place, at the perfect time in history to be in perfect places! Such is the kingdom of God!

    My advice: don't compete with the Alpha and Omega, just follow--and hang on tight!
     
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  14. Andrew77

    Andrew77 The walking accident Supporter

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    Proverbs 22:7
    The rich rules over the poor, and the borrower is slave to the lender.

    Pretty clear message, yes?

    Is there ever good debt? That's equal to saying "Is it ever good to be ruled over and slave?"

    Well of course not.
    What particularly makes debts bad, is that you often are buying stuff that drops in value.

    You buy a car for $25,000, that ends up costing $30,000 with interest, and yet in just one year is worth $20,000. You see the problem? You are paying more and more, for something that is worth less and less.

    Bad idea.

    Similarly, you rack up thousands of dollars in consumer debt, that the money you buy the item it's worth a fraction of how much you paid, not including interest.

    That's where real estate is different. Over all, the value of property goes up. Generally over time, the value of a house will go up, because there are more people.

    However, even there, you can still end up being slaves. I've met people who have jobs they absolutely hate, or even jobs they like, but they can't move on to something else, all because they are slaves to their mortgage, and can't afford to do anything but keep working.

    Slave to the lender is a real thing. I know people who spent $100K on student loans, and then they get a job, and end up not being able to do anything in life. All they can do is work to pay loans.

    So here is my basic advice:

    Buy a home smaller than you want.
    Buy a home with a 15-year mortgage.
    Buy a home that will cost you less than 25% of your take home pay. That's not your total wage, but 1/4 of the actual money that comes in your check. If you only make $2,000 a month, then you need a mortgage payment of less than $500. $4,000 / $1,000 a month mortgage.

    On top of this, you need to pay no less than 20% down. If the house cost $100,000, you need to pay $20,000 down.

    Yeah, you can find 0% down loans. I'm telling you not to do that. That's a great way to achieve slavery.

    You don't know what will happen tomorrow. None of us does. Generally home prices go up. But we know that they don't always go up. 2008 remember? Not that long ago, everyone ended up owing more money than the house was worth. Then you are trapped in a house, and if you need to move to a new job, you can't, because you owe more on the house than it is worth.

    Get the smallest mortgage you can, and pay it off as quickly as you can. That's the best advice. Yeah, that other house is so much nicer.... you can make do with less.
     
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  15. dqhall

    dqhall Well-Known Member Supporter

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    There are online calculators you may use to find out if it is cheaper to rent or buy a house in your area. The housing price to rent ratio varies from area to area. If you move around a lot, it is not always better to buy. It also depends on whether or not your income is reliable, what your current debt levels are and your credit rating. People with good credit ratings may find lower interest rate mortgages. Some houses are older and require repairs. Some are newer and more expensive. If the house you buy has really bad neighbors, it will not be fun living there. I checked crime statistics and police records for my neighborhood before buying my home here.
     
  16. Andrew77

    Andrew77 The walking accident Supporter

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    /delete
     
  17. Andrew77

    Andrew77 The walking accident Supporter

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    /delete
     
  18. miamited

    miamited Ted Supporter

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    Hi willing heart,

    Yes, and all I'm saying is that you have to live somewhere. What are your options? Of the available options, what is the wisest use of your money that you would spend for housing?

    You say you just bought your first home after 65 years of living. Did you live for free those 45 or so years you were on your own? If you've rented all of your life, when you moved, what did you have to show for it? Yes, owning a home comes with its other costs, but you have to understand that even when you rent, if the water heater breaks down, you're going to pay for it. You may not pay out of your pocket when it happens, but you are paying for it. No landlord operates a rental that isn't in it for some profit for themselves. So all those ordinary and regular expenses that a homeowner would have, are considered in determining the rent that you pay.

    If you want to upgrade some part of your home, say the kitchen or bathroom, if you're renting you're subject to whether or not the landlord will make those upgrades and even if he does, he's the one that gets the value out of the upgrade. If you own your own home and decide to upgrade, then you as the owner get the value of the upgrade.

    In the U.S. property taxes, if one itemizes, are a deduction against income. Not so if you rent. Mortgage interest is also a deduction against income and is the largest deductible expense that most people have that qualifies them to itemize. Not so with your monthly rent. That's just money you pay to a landlord and it allows you 30 days of peaceful enjoyment of his property. If you fall behind on your rent, and no, I would never advise anyone to do so, but if finances really became so tight that you couldn't pay your rent, most landlords would move to have you evicted within 60-90 days. A mortgage foreclosure takes a lot longer.

    Finally, when you do move for whatever reason, if you're renting you just give the landlord notice and you go. Nothing back in your pocket for years of faithful rental payments. With home ownership, even if you have to get a mortgage to do it, when you move, if you've maintained your property reasonably well, you'll get a lot of your hard earned money that you've paid over the years, back.

    My son graduated college 3 years ago and rented a two bedroom apartment in Columbia SC for about $850/month. It was right at 1000sf. He bought a 5 bedroom 4 bath, 5000 sf home with $30,000 down and his monthly mortgage payment was only $1,200/month. That included taxes and insurance. When he moved out 2 years later, that big home that he bought for $141,000 was sold for $248,000. He had done about $30,000 in repairs and improvements, but you can't get any return like that if you're renting. He walked away, after commissions and costs of improvements with about $50,000 in his pocket. I don't know of any landlord that would have given him $50,000 to move after two years.

    He took that $50,000 and bought a $320,000 home in Austin TX where he had been transferred. So his investment in a home for which he obtained a mortgage to finance has now put him in a beautiful 4 bedroom 3 bath home of near 3000sf in Austin TX with only about an $1800/month mortgage payment. He looked at some 2 bedroom 1000sf apartments in Austin and the cheapest decent place he could rent would have been close to $2500/month.

    Because of our current tax laws, all that money he made on that first house is tax free money. If one can afford it and is able to qualify for a mortgage, there really are very few reasons why one should choose to rent over owning. One would be if you know you're only going to be in an area for a short length of time. The initial costs of buying a home can't be recovered that quickly. But if you're going to be in an area for awhile, then I always encourage people to buy their home. Overall it just makes better financial sense.

    Now, I absolutely discourage my son from blowing good money on cars and other toys that just depreciate with use, but homes are different. Homes generally hold their value so long as the national economy is working well, and over the past 20 years, except for that short blip of 09-12, have generally increased in value. As I say, you have to live somewhere. Now the question is: What's the wisest use of your home dollar?

    You ask the question whether God wants us to be free of things that might cause us to be slaves? Absolutely!! But in our present national situation, you're either going to be a slave to your landlord or a slave to a mortgage bank. Unless you're born with a silver spoon and old family money, we all have to start providing a home for ourselves once we hit our 20's. We will generally get married and have children and raise a family and that just can't be done well without a roof over our heads. Trying to save enough money from a paycheck to be able to pay cash for a home just means we're going to be slaves to that landlord a whole lot longer.

    God bless,
    In Christ, ted
     
  19. miamited

    miamited Ted Supporter

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    [delete
     
    Last edited: Apr 2, 2018
  20. miamited

    miamited Ted Supporter

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    delete
     
  21. miamited

    miamited Ted Supporter

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  22. miamited

    miamited Ted Supporter

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    Must be a glitch in the server tonight.

    Hi andrew,

    If I might:

    I don't encourage 15 yr mortgages. I always encourge 30 and pay it off in 15 or less. This obligates one to less money per month if things get short. The 1/2 point in interest isn't really worth it to me. When you send your mortgage payment each month, put in a few hundred extra to pay off the principle faster, but if things go south with a job or some other financial emergency, you're obligated to a lower payment if necessary.

    I also would never encourage anyone to get a 0 down mortgage. 20% down is the target, but not everyone can do that without being beholden to mr. landlord for several more years. The worst thing about not having 20% down is that most mortgage banks will then tack on PMI which is just a waste of your money, but you can't get out of it. If you do have to go with less than 20% down, make sure that your PMI can be cancelled when you do have 20% down and find out what the rules are for that. Sometimes they'll let you cancel if you have a new appraisal that shows you have 20% equity and sometimes they require that you have 20% of the initial purchase price paid in. Some mortgages, I think VA is one of them, won't ever let you cancel PMI and so you have to just refinance when you can show you have 20%, although on some re-fi's they look for 25% loan to value to not place PMI. Be sure and check that out!

    If you can, I always encourage new buyers to buy with conventional mortgage money over VA mortgage money.

    God bless,
    In Christ, ted
     
  23. Haipule

    Haipule Well-Known Member

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    Dude! You may not be here to be a financial wiz kid. Just follow the Shepherd, the real wiz kid, and He will not lead you into destruction.

    Trust in Him in all your ways and you can't screw this up--you don't have the authority to!

    God's yes is yes(open door), God's no is no(closed door) and His stay is stay(can't go) and His go is go(can't stay)!

    Your a stupid sheep, He knows that! And He's all about those "green pastures" to lie down in. Remember what David said:

    The Lord is the one Shepherding me, I SHALL LACK NOTHING!
     
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