Could you afford to buy your own home now?

[Pea-n-Me]

Have they looked into refinancing assuming they've gained equity in the home? We refinanced 2 1/2 years into our mortgage to get rid of PMI.

Interest rates are now up around 5%, so that might increase their payment if they refinance. They could be better off just doing what they’re doing.

We had actually lost value the first time we refinanced, so we had to cough up an additional $10K just to get to a 7% refi.

 

[Meriweather]

yes, we could
It is paid off

 

[pigletto]

Our house has just about doubled in value since we bought it in early 2019. No, we would not have been able to buy it at what it costs now. In fact we would have been completely priced out of this part of the province.

 

[Mackenzie Click-Mickelson]

Interest rates are now up around 5%, so that might increase their payment if they refinance. They could be better off just doing what they’re doing.

We had actually lost value the first time we refinanced, so we had to cough up an additional $10K just to get to a 7% refi.

Sure but that's part of the equation no matter what. We've refinanced twice now (most recent being in May 2020). Closing costs, appraisal fees (we were waived for one in May 2020 but paid for one the first refinance) and all have to be considered regardless of the interest rate. But you'd want to calculate your total savings over the life of the loan not just the initial hit.

For the refinance we did (the first one) to get rid of PMI we went from 4.5% to a 4.25% the reduction in interest wasn't our main goal. Getting rid of the PMI when the only way we could have was wait until 2022 or 2023 (the maturation date) was our goal. In our case our home appreciated more than 15% (we had put a 5% down payment) in the 2 1/2 years so we saved quite a chunk of money even though our PMI was only about $160/month there were only two ways out of it refinance or wait for the maturation date. You couldn't call just to have it removed when you reached that equity mark due to changes in laws.

When I made my comment I was more thinking "what's the goal" and since the OP said "hoping to get their mortgage paid down enough to get rid of their mortgage insurance" it made me think their goal was to get rid of PMI and depending on when the home loan originated the only way to get rid of it would be to refinance due to the laws.

 

[Canadisney Fly]

.

Oh wait - that was a serious question?!?! I live in Vancouver - city with the third highest cost of living in the world (Tokyo is #1, and Sydney, Australia just displaced us for #2).

Nary a SHACK for under a million here (OK, those are Canadian dollars, but still!). A 1400 sq ft half-duplex across the street from me sold last week for $1.7M - which was $200K over asking.

My one and only DS is a fortunate boy, as he is my only heir, but he's going to have to wait a VERY long time, as I plan to be around for quite a while (and I've already braced him for contributing to the mortgage as soon as he starts working). However, I would give up the last 12 years of this accumulated equity "wealth" to have this next generation actually be able to conceive of saving up and buying a home (my house is three times the value that I paid in 2008). My 30-something employees don't know what to work towards, and trying to draw in talent from outside the city is impossible - who would move here with sky high rents, little hope of purchasing a home, yet get paid the same salary as someone working in a smaller city with a lower cost of living (I work for the government, so wages are the same for equivalent positions across the country).

 

[holden]

DH and I bought our first house when we were 22 and 23. I worked and saved all through high school and college. We had enough for a decent downpayment on a 3BR townhouse.

We bought our second home in 1998 and sold that in August. We hadn't had a mortgage for a long time, so it was scary of think of having one again, but we do.

 

[candy0730]

I am jealous of everyone's home values increasing so much. We bought our house 20 years ago and it hasn't even doubled. Maybe 1.5 times but that is even pushing it.

 

[mel&me]

No , my house is worth 3x what I paid for it in 98.
And that's without factoring in the 6 acres I bought behind me from my neighbor that moved
4 years ago.
That is on a separate deed.

 

[Grand Koalafornian]

Nope. My crappy little condo is now valued at double the price it was when I bought it seven years ago. My income has gone up about 25% in that time.

 

[Skippy918]

I could not afford my house if I were to buy it today assuming I was not selling existing real estate to purchase it. Our house has tripled in value in 18 years.

 

[1GoldenSun]

I could afford it but would probably choose something else at these prices.

 

[DCLMP]

yes, we could
It is paid off

But would you buy it at current sale price was the question.

 

[DCLMP]

No I could not afford it. I’m having a hard time paying for the upkeep, college, food, gas and everything else.

 

[AuntieMe3]

Yes, now we can, even with a large value increase. We are much better off financially now then we were when we bought in the first place. If we wouldn't have bought it from my grandparents, we wouldn't have been able to afford it otherwise.

 

[nene0182]

We could but I probably wouldn’t.

 

[dvcgirl67]

Yes, but I wouldn't buy it again....even though we've loved our time here. We're looking ahead to retirement in the coming years and while we go back and forth about keeping it as a rental property......we are thinking we'll sell this house. Not sure if we'll want to buy a smaller house in another state to have a home base, or just be long term renters in parts of the world where we'd like visit. It's been a great experience being a homeowner, but it's ultimately not always the best investment.

I know lots and lots of people here will say that they've made a fortune in the last several years especially...in equity. But over a longer period, 15+ years, that's not always the case. The housing market will not continue to appreciate like it has in the last few years...it's not possible for most parts of the country.

And if people are really honest about all of the money we sink into our homes for repairs...etc, it's an expensive indulgence a lot of the time. It'll just be my and my husband and one little dog in 4-5 years. Two of our older dogs will likely have passed by then, and so we're just itching to travel with our one little dog that we'll likely still have. Not sure how long we'll want to do that, but we're both wanting an adventure. If we tire of it, we'll come back to the States and rent...maybe buy, we'll see. We've seen how our parents have aged so we know what to expect....and so we want to make the most of our 60s .

 

[RamblingMad]

I can afford twice the house I have today. And it since doubled since I bought it. My mortgage payment is now less than rents for one bedroom apartments.

Check out the Babylon 5 episode from season 1: By Any Means Necessary.

 

[Cannot_Wait_4Disney]

When we bought our house it was a nice starter home. We most certainly can afford it now and a much bigger one if we wanted one. However the important issue imo is If we were just starting out now without our accumulated funds, we could not. That people just starting out can't even afford our house here is rather a bad thing.

 

[Moliphino]

Technically yes, but it wouldn't be smart. Zillow thinks it's worth $100k more than when I bought it 2 years ago.

 

[MamaBelle4]

Nope. My house would likely sell for double what I paid for it 13 years ago.

Same here. We bought right after the bubble burst and it was a foreclosure. It's worth between 2 - 3 x what we paid.