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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. Kit Sigmon

    Kit Sigmon Well-Known Member

    +1,273
    Christian
    In Relationship
    I know some people who saved up their money and then went searching for fixer upper homes in the $25,000.00 price range... they would buy a place if it met their requirements and then they'd do renovations on the fixer upper.
    They had no qualms about moving to different states or where ever, they just wanted an affordable house that they could live in as they did the renovations.

    Which is similar to what me and my husband did...buy a fixer upper and sell it once the housing market picks up. We did that twice and by the time we sold the second home we had enough money to buy our next home without having to get a mortgage.

     
  2. discipler7

    discipler7 Well-Known Member

    +317
    Heard Island And Mcdonald Islands
    Christian
    Single
    AFAIK, the Bible or Word of God prohibits interests being charged on debts. DEUT.15:11 requires all remaining debts to be discharged or forgiven every Sabbath Year or 7th Year.
    ....... If only Christians can live in a country that follows this Law.

    But the secular world is ruled by Satan, even USA and Europe. Exploitative interests charged by banks on debts/mortgages/etc is one of his ways to harm foolish and greedy people, eg the US 2008 toxic mortgages backed by credit default swaps(= insurance against defaults) economic crisis that led to a home foreclosure epidemic, bankrupties, homelessness, etc. Home prices dropped by half = underwater home mortgages.

    In the beginning,(= early 1900s) there were very few home mortgages offered to the people by banks and most people in the US bought homes by saving money for about 10 years before paying cash for a home = home prices were low because of low demand.
    ....... During the 1950s and 1960s, through infrastructure technology advancement(= eg vehicles/cars, roads, telephones, etc), home mortgages offered by banks began to proliferate = home prices rose substantially because of moderate demand caused by the availability of mortgages.
    ....... During the early 1990s, the US government allowed banks to easily offer up to 100% and 30-year mortgages,(from 70% and 20-year mortgages previously) = home prices began to rise through the roof because of very high demand caused by such easy availability of home mortgages.
    ....... Thereafter, mortgages from banks got easier and easier, eg US$50k cash + 100% + 30-year ARM mortgages during the early 2000s = easy toxic mortgages.

    Today, it is no longer possible for most people to save money for about 10 years before paying cash for a home because of very high home prices = they need to rely on mortgages from banks. All they can do is minimize their risk to home foreclosures and bankruptcy, eg opt for a 70% + 30-year mortgage at a low fixed interest rate.
    ....... One of the ways banks can make more profits from mortgages is to increase the interest rates, ie tempt people to get home mortgages with low interest rates and later increase the rate to double.
     
  3. Mountainmike

    Mountainmike Well-Known Member Supporter

    +1,065
    Catholic
    Married
    If you do it to have somewhere economical to live in , cheaper than rent. why not? If living entails borrowing which for most people it does, like buying a car or furniture on credit, then a house is no different.

    It is attachment to earthly things, buying a house bigger than you need, because you love the house, or pride in the car you drive to be seen in it, that becomes problematic. Or Indeed doing it in order to become wealthy. Motive matters

    Appart from which the policies of money printing , controlling inflation i.e. Reducing value of money continuously are not natural, fuelling all the asset bubbles, property, now equities which will all end badly, and so buying a property for investment often means trying to preserve the value not increase it, avoiding central governments determination to destroy the value of anything you have.

    It is truly an investment for the future, even if the property does not change value - because rent will continue into pension age. Paying for a house is time limited,


     
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  4. FutureAndAHope

    FutureAndAHope Just me Supporter

    +972
    Christian
    Married
    Pro 31:16 She considereth a field, and buyeth it; With the fruit of her hands she planteth a vineyard.

    The bible praises the godly woman for one of her virtues, buying an investment. Not all Christian's can afford an investment, however, if you don't have a mortgage you are eventually paying dead money into a rental for which you have no return. If you can afford a mortgage you should have one in my opinion. Again this does not show your Christian-ness it does not make you more or less of a Christian to have one or not. The bible also says a wise man passes on a heritage to his/her children. That heritage can be purely spiritual (for the financially poor, yet rich in faith), but wise God directed investment can pass on financial wealth as well.
     
  5. FutureAndAHope

    FutureAndAHope Just me Supporter

    +972
    Christian
    Married
    Pro 31:16 She considereth a field, and buyeth it; With the fruit of her hands she planteth a vineyard.

    The bible praises the godly woman for one of her virtues, buying an investment. Not all Christian's can afford an investment, however, if you don't have a mortgage you are eventually paying dead money into a rental for which you have no return. If you can afford a mortgage you should have one in my opinion. Again this does not show your Christian-ness it does not make you more or less of a Christian to have one or not. The bible also says a wise man passes on a heritage to his/her children. That heritage can be purely spiritual (for the financially poor, yet rich in faith), but wise God directed investment can pass on financial wealth as well.
     
  6. Ancient of Days

    Ancient of Days Well-Known Member Supporter

    +751
    United States
    Christian
    Married
    US-Constitution
    Once you own the house its still a liability as it costs money to operate. Cash flow out and no cash flow in. Property taxes, electric, gas, water, sewer, and the list goes on and on. If and when you sell it is no guarantee of a profit. So until the moment a profit is realized it IS a liability, not an asset. Again, for something to be in the asset class it has to have positive cash flow coming in, so unless you are renting it out its a liability.
     
    Last edited: Apr 2, 2018
  7. Ancient of Days

    Ancient of Days Well-Known Member Supporter

    +751
    United States
    Christian
    Married
    US-Constitution
    Once you own the house its still a liability as it costs money to operate. Cash flow out and no cash flow in. Property taxes, electric, gas, water, sewer, and the list goes on and on. If and when you sell it is no guarantee of a profit. So until the moment a profit is realized it IS a liability, not an asset. Again, for something to be in the asset class it has to have positive cash flow coming in, so unless you are renting it out its a liability.
     
  8. Ancient of Days

    Ancient of Days Well-Known Member Supporter

    +751
    United States
    Christian
    Married
    US-Constitution
    Once you own the house its still a liability as it costs money to operate. Cash flow out and no cash flow in. Property taxes, electric, gas, water, sewer, and the list goes on and on. If and when you sell it is no guarantee of a profit. So until the moment a profit is realized it IS a liability, not an asset. Again, for something to be in the asset class it has to have positive cash flow coming in, so unless you are renting it out it a liability.
     
  9. Ancient of Days

    Ancient of Days Well-Known Member Supporter

    +751
    United States
    Christian
    Married
    US-Constitution
    Once you own the house its still a liability as it costs money to operate. Cash flow out and no cash flow in. Property taxes, electric, gas, water, sewer, and the list goes on and on. If and when you sell it is no guarantee of a profit. So until the moment a profit is realized it IS a liability, not an asset. Again, for something to be in the asset class it has to have positive cash flow coming in, so unless you are renting it out it a liability.
     
  10. Ancient of Days

    Ancient of Days Well-Known Member Supporter

    +751
    United States
    Christian
    Married
    US-Constitution
    Website has gone crazy. Mods please delete multiple posts...
     
  11. AlexDTX

    AlexDTX Well-Known Member Supporter

    +2,296
    United States
    Christian
    Married
    US-Others
    I agree with you. Borrowing money is not forbidden, but remaining in debt is. Also, mortgages are usurious so we do not want to support their high interest any longer than we have to do so.

    My wife and I live debt free. When we bought our first home the lender told us how to use the amortization schedule to our advantage. Principal is a small amount of each monthly note in the first few years. 90% of the note in the beginning is pure interest. When you pay your note, by using the amortization schedule you see how much the principal of the next month note is and pay that with the current note. By doing this you eliminate the interest of that next month.

    Our first home was purchased for $70,000. If we paid the 30 year note with no extra payment it would have cost us $350,000. Instead we paid off the home in 10 years and it cost us $140, 000. Still usurious payment. However, when we sold our home we got $140,000 for it and rolled that into our second home which we bought for $240,000. We began the same system of payment, then gained an inheritance with which we paid off the home in 2 years.

    Some argue that the tax deduction makes having a mortgage worth while, but that is baloney. When you add up the interest you pay compared to the deduction benefit you gain, you are still losing bukko bucks.

    God wants us to live debt free and He will make a way if you look for it.
     
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  12. Tree of Life

    Tree of Life Hide The Pain

    +5,543
    United States
    Reformed
    Married
    Well fair enough, I suppose. But what's the purpose of recognizing this? Is the fact that a house is a liability supposed to deter us from ever owning a home? I don't see what the better alternative would be. In renting we also spend lots of money without the advantages of home ownership.
     
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  13. MoneyGuy

    MoneyGuy Newbie

    905
    +556
    Christian
    Married
    A house is most certainly an asset. You need a place to live and you may as well own your four walls. Real estate generally appreciates in value.
     
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  14. Jonathan Leo

    Jonathan Leo Well-Known Member

    708
    +276
    Ireland
    Christian
    Married
    A mortgage is nothing more than a snare. It’s how the system ensures a workforce. The bank creates a debt out of thin air and if you don’t pay them a monthly fee for 30 years of your life, they take your home. I know builders need to be paid for their houses and that’s all fine, but try and walk into a bank and ask for half a mill in cash without putting your house up for surety and you will be shown the door. With a mortgage, nobody sees money.

    You get a mortgage, not cash
    You get a house
    You spend most of your time outside the house.
    You need to leave it every morning/night to go to work in order to pay for the house.
    Your stuck in traffic going to a job you don’t particularly like but need the money to pay for the house
    Most of your life in spent sleeping in the house
    When you get old, you retire to the house but most people are put into nursing homes by the very people who you put the house around them
    Then the house is left to the siblings which causes division because of greed
    You die, they sell or keep the house and reap the benefits of all your hard work Ecclesiastes 2:17-26

    A mortgage is nothing more than entrapment. Why can’t man claim a piece of land ( limited size ) and build his own house with however he wants? Sure that’s what people do but it’s all depended upon the bank.

    You can’t just claim land, you have to pay for it. Why does one man need to pay another man for something that God has given freely? Corruption and control, that’s why

    Once you have the land, you must declare if building on it. You need permission by the council to build your house on your land! That’s messed up

    Once given permission and you decide to start, you can’t get a cash loan for house building. Instead it’s classed as a mortgage because if you can’t repay the loan, your house is surety.

    Once your house is built and your in debt for most of your life, you need to pay heating bills electricity bills gas bills on top of it. Furthermore you need to pay a property tax annually and it depends on the size of your house!

    The only way I would buy a house is if I won the lottery.
    My two cents is stay away from a mortgage
     
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  15. Jonathan Leo

    Jonathan Leo Well-Known Member

    708
    +276
    Ireland
    Christian
    Married
    A mortgage is nothing more than a snare. It’s how the system ensures a workforce. The bank creates a debt out of thin air and if you don’t pay them a monthly fee for 30 years of your life, they take your home. I know builders need to be paid for their houses and that’s all fine, but try and walk into a bank and ask for half a mill in cash without putting your house up for surety and you will be shown the door. With a mortgage, nobody sees money.

    You get a mortgage, not cash
    You get a house
    You spend most of your time outside the house.
    You need to leave it every morning/night to go to work in order to pay for the house.
    Your stuck in traffic going to a job you don’t particularly like but need the money to pay for the house
    Most of your life in spent sleeping in the house
    When you get old, you retire to the house but most people are put into nursing homes by the very people who you put the house around them
    Then the house is left to the siblings which causes division because of greed
    You die, they sell or keep the house and reap the benefits of all your hard work Ecclesiastes 2:17-26

    A mortgage is nothing more than entrapment. Why can’t man claim a piece of land ( limited size ) and build his own house with however he wants? Sure that’s what people do but it’s all depended upon the bank.

    You can’t just claim land, you have to pay for it. Why does one man need to pay another man for something that God has given freely? Corruption and control, that’s why

    Once you have the land, you must declare if building on it. You need permission by the council to build your house on your land! That’s messed up

    Once given permission and you decide to start, you can’t get a cash loan for house building. Instead it’s classed as a mortgage because if you can’t repay the loan, your house is surety.

    Once your house is built and your in debt for most of your life, you need to pay heating bills electricity bills gas bills on top of it. Furthermore you need to pay a property tax annually and it depends on the size of your house!

    The only way I would buy a house is if I won the lottery.
    My two cents is stay away from a mortgage
     
  16. miamited

    miamited Ted Supporter

    +3,327
    United States
    Christian
    Married
    Hi success,

    You wrote:
    That just isn't a true statement. The equity that we own in anything is an asset. Have you ever done a personal balance sheet? Even the amount that you have value in an automobile over and above what you owe for it, is an asset. I honestly don't know what school of finance you attended, but I'd seriously consider requesting a refund.

    God bless,
    In Christ, ted
     
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  17. miamited

    miamited Ted Supporter

    +3,327
    United States
    Christian
    Married
    My apologies in the above post. I addressed it to the wrong poster and when I tried to edit it, it wouldn't pull up the post. So, the best I can do at this point is to ask everyone's forgiveness and say that the post was directed to ancient of days.

    Thanks,
    In Christ, ted
     
  18. GUANO

    GUANO Well-Known Member

    740
    +318
    United States
    Non-Denom
    Married
    A mortgage can be less expensive than rent in many cases. Not to mention that you're literally just throwing your money away when you rent--absolutely nothing to show for it.
     
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  19. RaymondG

    RaymondG Well-Known Member

    +2,725
    United States
    Christian
    Married
    This is just incorrect. Your house, especially when paid off, IS an asset. Legally it is an asset. If you are in any legal situation, and you have to write down all your assets and liabilities.....you have to list the house as an asset, or be accused of perjury. So it is unwise to try and convince people that it is not an asset....when, by law, it is. Maybe not in your mind, which is ok......but it is also, ok for it to be an asset in others mind, since this is by law. When a business come to you to collect debt you owe......they dont take more debt from you.....they take your assets.....and your house is the most common thing they take....if they cant get cash....

    Most of the bills you mentioned will still have to be paid whether you own the house or rent someone else house.....and if you rent.....a lot of times the rent you pay, is higher than a mortgage.

    You are still at an advantage even if you sell a home for less than you bought it......had you just paid rent.....all the money is gone and you go to the next location not being able to take anything you spent to live in the previous location.

    For those who can, mortgage is usually better than renting. And if you dont like the benefits of owning, you can alway give the house away for free and move to an apt, and it will be just like you were renting all along......

    There are only two options if you choose to live under a roof: Pay your own mortgage and/or property tax, or Pay someone else's mortgage and/or property taxes (and fill up their bank account in the process). Either choice is fine.....I just happen to think that the former is wiser.
     
    Last edited: Apr 2, 2018
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  20. RaymondG

    RaymondG Well-Known Member

    +2,725
    United States
    Christian
    Married
    DUP/

    Note, Only click reply once....no matter how long it takes... The number of posts posted will equal the number of times you clicked reply......even if it was after a page refresh.
     
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  21. miamited

    miamited Ted Supporter

    +3,327
    United States
    Christian
    Married
    Hi alex,

    You wrote:
    Yes, absolutely true that you don't get back dollar for dollar what you pay in interest with tax itemization. However, I'd ask how much money you ever got to deduct from your taxes of your rent? Something is better than nothing. It's just apples to apples.

    If you rent a home for $2,000/month, you will spend $24,000/year for which you will get nothing in return except the freedom to live in the house for a year. If you buy a home and pay $2,000/month, at the end of the year, if you itemize, you'll get about 10% or so of the interest you paid over and above the standard dedution amount. Now that may only be $10 but it will be your $10.

    Now, as has been already mentioned, early on in a mortgage, some 90% or better of your payment will be for interest. So, if you're paying $2,000/month for a mortgage payment, then at the end of the year you'll have about $22,000 of interest deduction towards your tax bill. Under this year's tax law, about half of that will be over and above the standard deduction (next year will be considerably different). You will also get to deduct, since you've exceeded the standard deduction, the $4,000 in property taxes that you paid. So, bottom line, you're going to be able to take some $15,000 off of your taxable income and of that $15,000 you're going to get about $1,500 back from your tax withholding that you wouldn't have otherwise gotten.

    I'd be happy to see how much of your $24,000 in rent you're going to get back from your tax withholding. So no, no one with any sense would ever say that mortgage interest will come back to you dollar for dollar from your tax withholding, but often times it can be a good little chunk that someone who rents doesn't get to take advantage of.

    Now, let's look at the completed picture. The renter spends $24,000/ year and gets nothing in return. The homeowner spends $24,000/ year and gets a $1,500 refund that he wouldn't have otherwise gotten. He also has a bit more equity in his home that he gets to sell when he's ready to move and recover all or more of the principle that he paid for his home. Interest, just like rent, is generally always a losing proposition, but there are some advantages over paying interest rather than rent.

    The real issue here is that we all have to live somewhere and we want to be wise about how we fund that roof over our heads.

    God bless,
    In Christ, ted
     
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  22. dqhall

    dqhall Well-Known Member Supporter

    +1,400
    Christian
    Single
    If you buy a house with a mortgage, you have to add in property taxes, interest expense, homeowner's insurance, repair or replacement of the roof, plumbing, appliances, painting etc. You also may be liable for homeowner's association fees. You get closing costs at time of purchase. At time of sale there are more closing costs plus real estate broker commissions typically 6%.

    Some investment advisors do not count your primary residence as a measure of your net worth. They count investable assets such as cash, CD's, bonds, stocks, and private equity as these might be sold without making you homeless. Bonds pay interest and some stocks pay dividends or reinvest their profits.

    Warren Buffett bought a house for $31,500 in 1958. It is now worth over $650,000. He did better in the stock market as those investments made him a billionaire. Typically people living in an area long term may be better off buying a place.
     
  23. RaymondG

    RaymondG Well-Known Member

    +2,725
    United States
    Christian
    Married
    This is not a religious or spiritual issue. It is a personal choice....and no one should be made to feel like they are doing some for or against God based solely on their decision to rent or buy via loan or cash.

    If you want to bring up a religious issue....think about what need to be done to buy a home with cash......you have to store up large sums of money.....money that you could have given away to the poor.....yet you build it up so that you can buy something large for yourself...... I think more religious people would have a problem with this than would have an issue with a mortgage.

    As for general wisdom....Mortgaging, if you can, is usually better than renting.....and buying out right. The rich, do not buy houses outright.....maybe small ones for others.....but not the multiple million dollar houses. WHy? reasons are plenty.......There are taxes.....there is the fact that the money will appreciate more in stock and in the bank than it will in a property etc....

    Your type of thinking keeps people poor. imagine a 70 year old couple having to continue to work to pay high rent which will continue to increase in their life time....all because someone told this not to get a mortgage.....which, if they had, they would not have a rent now and would have something to sell for profit which they could live off the rest of their lives.

    Our desire should be that everyone be equally rich, both spiritually and naturally.
     
    Last edited: Apr 2, 2018
  24. miamited

    miamited Ted Supporter

    +3,327
    United States
    Christian
    Married
    Hi dq,

    You responded to my post:
    Other than closing costs and real estate commissions for sale, you will pay all those other expenses if you rent also. You just don't make your personal check out to some insurance company or home repair company. Your landlord does that. Then, at the end of the year, your landlord figures up how much he spent to provide you a home and adjusts your rent accordingly. Landlords are not in the business of giving their money away for someone else's housing. Why can't people get that?

    When you rent, you pay property taxes. Often those property taxes are higher than homeowners pay. Rental properties are considered business properties and are therefore, in most tax jurisdictions, assessed every year for changes in value. What ever change in that value, as a business property the new assessment will reflect the total increase in value.

    Homeowners, on the other hand, generally have caps as to how much their real estate can be taxed. When I lived in Miami Fl I lived in a home that was worth three times as much as my rental. The tax bill on my rental was going up every year and was, as far as value, much higher for my rental than it was for my own personal residence. Even in total dollars my tax bill on my $200,000 rental was often higher than my tax bill for my $600,000 personal home. Now, when I figured how much I had to charge any tenant for monthly rent, I would sit down and break down the taxes and the homeowner's insurance by 12 months and add that to the base rent. Then I would tack on another 10%/month for expected repairs. All of that would be put into the equation for what would be considered fair rental value.

    Now, I paid all those bills and therefore got all the benefits, as a rental business, in deducting the amount I'd spent on insurance and taxes and repairs and depreciation in order to pay the tax man what was considered my 'profit' in operating the rental. The tenant got nothing, nada, zero credit for any monies that he paid me even though that money was spent to pay the property taxes on the home.

    If you are renting a home that is in an HOA, you're going to pay those HOA fees as a part of your rent also. So, a renter pays everything that a homeowner pays, plus a little profit for the landlord.

    You also wrote: Some investment advisors do not count your primary residence as a measure of your net worth. They count investable assets such as cash, CD's, bonds, stocks, and private equity as these might be soldwithout making you homeless. Bonds pay interest and some stocks pay dividends or reinvest their profits.

    Every investment advisor counts any equity in a home as a measure of net worth. They don't count it as a liquid asset. The assets that you list are what an investment advisor would consider as 'liquid' assets. Assets that can be reasonably quickly liquidated for money without putting you out on the street. But net worth is always the difference between what you owe and what you own. Be it a house, car, boat, or anything else that has value.

    God bless you,
    In Christ, ted
     
    Last edited: Apr 2, 2018
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