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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. *LILAC

    *LILAC Keeping it simple. Supporter

    +6,498
    Canada
    Christian
    Married
    Wow, interesting thread. We just paid off our mortgage and not once did thoughts like this cross our minds. In my experience, better to pay a mortgage than expensive rent.
     
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  2. RaymondG

    RaymondG Well-Known Member

    +2,866
    United States
    Christian
    Married
    Thanks, I see nothing wrong with your plan for after retirement housing.
     
  3. Jonathan Leo

    Jonathan Leo Well-Known Member

    708
    +276
    Ireland
    Christian
    Married
    A mortgage should not carry the penalty of losing your home. It’s the only reason why I condone a mortgage
    Sure, there has to be protection to ensure people don’t take the mick and steal houses from the banks.
    That’s why I believe if you pay your cash deposit of 20% of the value and are financially assessed to show you are working and not some drug dealer, you should be given the house. If you can’t pay your mortgage you should be brought before a judge not to lose your house but for the bank and client to come to a fair agreement based on finances. If your in breach of that judgment you face jail.
    Mortgages put huge pressure on the family to keep paying for the house. Most people with fresh mortgages don’t socialize, eat properly, and sacrifice some comforts of the house, the very thing your working your ass off to pay for
    Again, my two cents
     
  4. miamited

    miamited Ted Supporter

    +3,614
    United States
    Christian
    Married
    Hi AofD,

    Let me see if I can do the same for you. If you rent a home with a value of $250,000, your monthly rent will likely be about $2,000/month based on a standard value to rent ration of .08. If you rent that home for 30 years you will have paid somebody (you seem to have a strong distaste for paying someone interest and that's ok) $720,000. You'll walk away at the end of that 30 years with nothing. If, on the other hand you bought the home and paid out $720,000 in interest and repairs, at the end of the 30 years you can sell the home for likely more than you paid for it as you yourself have agreed. You sell it using your $400,000 sales price minus a $24,000. commission and you walk away with $376,000 in your pocket. Now, walking away with $376,000 in your pocket isn't going to make you rich by any stretch of the imagination, but...

    If you stay in the house, all you have to pay after paying the mortgage (and very few people actually carry a mortgage out for its full 30 year payoff and so a buyer isn't really going to pay $289,000 in interest over the life of the loan. Most people in 10-15 years earn enough money to retire their mortgage much earlier than the amortization schedule works out.) but, if you stay in your home after paying off the mortgage, all you have to pay are taxes, insurance if you want to, and make necessary repairs. At this point the buyer is head over heels in a better financial position than the poor guy still paying his monthly rent month after month after month after year after year after year ad nauseum until he dies.

    You somehow keep forgetting that we all have to live somewhere. We all have to pay somebody for a roof over our head.

    You're welcome to avoid banks at all costs if you like. Personally, I've always found banks to be helpful as far as financial goals, but they do have to make money just like my local Walmart and Publix supermarket. They make their money by charging interest and other fees. Walmart and Publix make their money by charging an amount over and above what they pay for the goods that they sell you. Friend, every business is in the business of making money. I don't begrudge any business that ability, and so long as I'm wise in my spending, Walmart helps me to have the 'things' I want to have around the house. Publix provides me the food I put on my table so that I can eat every day (and snack). My bank provides me the capital that I need to buy things of greater value that allow me the opportunity to have a roof over my head.

    BTW, after you've paid the landlord the $720,000 for living in his house for 30 years, you've paid off his mortgage and you still have to pay him rent every month if you want to keep the key to his front door. You're welcome to go with whichever plan suits you best.

    God bless,
    In Christ, ted
     
    Last edited: Apr 2, 2018
  5. Jonathan Leo

    Jonathan Leo Well-Known Member

    708
    +276
    Ireland
    Christian
    Married
    That’s nice bro and thank God your fortunate enough to be in that position, but there are people who are unfortunate and end up losing their houses because of financial difficulty. I said in another post that the penalty for not being able to pay your mortgage due to financial difficulties should not be the taken of your house
     
  6. Willie T

    Willie T St. Petersburg Vineyard

    +1,749
    Christian
    Married
    A mortgage is NOT an asset. A home is an asset... one that is going to cost you to maintain its value. The mortgage is an albatross around your neck. It will cost you at least 3 times the value of the house by the time you get it paid off. The supposed "tax credit" is a joke in comparison to buying a house for cash.
     
    Last edited: Apr 2, 2018
  7. RaymondG

    RaymondG Well-Known Member

    +2,866
    United States
    Christian
    Married
    Just so happens that Renting for 30 years will cost you 3 times the value of a house as well......also with a joke of a tax credit (no tax credit) , and nothing that you can sell at the end.
     
  8. MoneyGuy

    MoneyGuy Newbie

    905
    +557
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    What about paying a similar amount or more over those years and not owning anything when you're done?
     
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  9. lismore

    lismore Legend

    +1,985
    Christian
    Single
    Hi Willing-heart. A mortgage can seem good especially when compared to the otherwise lifelong necessity of rent. As the bible says 'The Boundary lines have fallen for me in pleasant places, surely I have a delightful inheritance'. Once you own your own place there is no more rent and no-one can evict you from your own home. With renting you're never free. God Bless :)
     
  10. Ancient of Days

    Ancient of Days Well-Known Member Supporter

    +751
    United States
    Christian
    Married
    US-Constitution
    Using a comparison of owning a home vs. renting and coming to a conclusion based upon that comparison has absolutely nothing to do with my original statement that a home is not an asset and that it's a liability. So based upon your logic, if you give me $750,000 today and in 30 years I give you back $350,000 - somehow, that is considered an asset? I would call that a $400,000 loss which is a liability. Again, anything that continually costs money to operate and doesn't generate revenue is a liability.

    And why would someone rent a home at $2000 a month when they could rent a two bedroom apt. for $1000 a month. At the end of 30 years that would be over $320,000 in their pocket which could be invested along the way(making interest) while your money is tied up with the bank. Homes are money pits, I don't care how you slice it.
     
    Last edited: Apr 2, 2018
  11. Willie T

    Willie T St. Petersburg Vineyard

    +1,749
    Christian
    Married
    Of course, I doubt there is anyone who could argue that renting is a wise expenditure of your money.
     
    Last edited: Apr 2, 2018
  12. Ancient of Days

    Ancient of Days Well-Known Member Supporter

    +751
    United States
    Christian
    Married
    US-Constitution
    Why? You paid for services rendered, nothing wrong with that.
     
  13. MoneyGuy

    MoneyGuy Newbie

    905
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    I'm a big fan of owning but there are times that renting wins.
     
  14. miamited

    miamited Ted Supporter

    +3,614
    United States
    Christian
    Married
    Hi AofD,

    Look you've obviously decided that your explanation works for you. I think that each man should be decided in their mind and let their yes be yes and their no be no. What you don't seem to be able to comprehend is that every financial guide that you will ever use to determine your net worth is going to include your principle residence, and for that matter any second or third homes that you might own, as an asset. The equity in that asset will be the difference between what it's worth and what you still owe on it. You are free to call it whatever you'd like.

    I have owned my homes since I was about 30 and I've always ended up better than any renter that I know of, financially. Today I'm 62, retired at 50 and it costs me about $2,000/year to live in my home plus any repairs or improvements I might make. It's a five bedroom 3 bath home on 1.75 acres in a beautiful little town and a beautiful little neighborhood in that town. It's a very stable neighborhood. The last person to move into one of the homes within sight of my house was over 5 years ago.

    Because I bought my home and paid the mean ole' usurious banker his interest,(and actually I didn't. Because I had bought and sold homes before, I was able to pay cash for the $300,000 home I'm in now.)I now get to live pretty cheap. It was a good trade for my money. The home I bought before this one, I paid $205,000 for and paid that mean old usurious banker his due and sold that home 10 years later for $625,000. I took just a part of that $625,000 of completely tax free money and paid cash for the home I'm in now. Yes, I would actually thank that mean ole' usurious banker for giving me the mortgage on my previous home. I also paid the mortgage off on that previous home before I sold it and so I got $625,000, minus real estate commission, completely tax free.

    So, if anyone is interested in financial freedom---buy your home. Put as much money down as you can, but buy your home. Then work to pay it off as quickly as you can.

    God bless you,
    In Christ, ted
     
  15. Haipule

    Haipule Well-Known Member

    681
    +424
    United States
    Christian
    Married
    When we are younger and make more and more income it makes sense, tax wise, to increase your mortgage dept, by buying more expensive properties to stay ahead of the tax burden. However, when you want to start to slow down and enjoy more time, your large mortgage WILL become a gilded gage!

    Also, if interest rates lower and property values go up, you will be offered by every lender to refinance your property, lower your payments and take cash out. Well sure, lower your interest rate and payments by refinancing but, DON'T TAKE CASH OUT!

    That is unless you are going to invent that money into a business or, income producing property.

    The ones that took that sucker offer prior to 9/29/2008, and some more than once, lost their homes and many filed for bankruptcy.
     
  16. Haipule

    Haipule Well-Known Member

    681
    +424
    United States
    Christian
    Married
    Sorry, invest not "invent"
     
  17. nanookadenord

    nanookadenord Well-Known Member

    900
    +517
    Episcopalian
    Single
    Some day my credit will be good enough and wage high enough to own my own home. Then I can get out of this renters hell that I live in where I am subject to their rules and may lose my dog because new owners came in and they now have a dangerous breed list where there wasn't one previously. Half my dog is on the list as he is half husky.

    Just don't know when that day will be because EMT's don't make much and I don't want to be a Paramedic or nurse.
     
  18. RaymondG

    RaymondG Well-Known Member

    +2,866
    United States
    Christian
    Married
    For you it is not possible....but for God nothing is impossible. You can have exactly what you want, by asking your Father for it and stepping out the way.......
     
  19. GUANO

    GUANO Well-Known Member

    740
    +319
    United States
    Non-Denom
    Married
    ouch
     
  20. nanookadenord

    nanookadenord Well-Known Member

    900
    +517
    Episcopalian
    Single
    Yep
     
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