Whats a morgage?

[MM32830]

One thing about a mortgage - by the time you actually own the house, you may have paid double or triple the cost of the hosue. That is the interest the back collects while loaning you money.

One MAJOR advantage is that if a mortage is fixed the amount paid monthly never changes whereas a rent payment willl almost always increase yearly.

If you get a mortgage today and pay $1200 a month, that's the price you will pay for the next 30 years (on a 30 year mortgage). While renting is probably cheaper right now, I can guarantee you that a rent payment of $800 a month will increase substantially over the next 30 years, easily surpassing the mortgage payment.

Then, in 30 years when the mortgage is paid, there is no more mortgage payment but the renter continues to pay rent.

Yes, in all the discussions above, I have not factored in homeowners insurance or property taxes. Let's not forget maintenance also. But even with all these expenses, there is almost no doubt in a normal market owning a home is, by far, a less expensive alternative to renting.






________________
Armand

 

[mainegal]

Then, in 30 years when the mortgage is paid, there is no more mortgage payment but the renter continues to pay rent.

Yes, in all the discussions above, I have not factored in homeowners insurance or property taxes. Let's not forget maintenance also. But even with all these expenses, there is almost no doubt in a normal market owning a home is, by far, a less expensive alternative to renting.


________________
Armand

Last year we were considering purchasing a house. We crunched ALL the numbers including the expected increases in rent and property tax, maintenance on a house, where money is can be "saved" (in the house vs. stocks or CDs). We also took into account how much work (painting, lawn care, snow plowing) we would do on a house ourselves vs. hiring someone.
We also took into account the tax advantages. Not so much in our case since we would be putting down a high down payment (keeping tax detuctable interest down).

The numbers came out very close.

In the end, we decided to stay put in our apartment. It is in a great location and a great view.

What I miss is a place to store a Chirstmas tree or to properly display one. I do not miss shoveling snow and raking leaves. I kinda enjoy going for walks when other people are raking and shoveling.

Could also be that we are in a place where our rent is relatively low compared to the price of a house that is in decent shape.