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Thread ID: 92632	2008-08-17 05:02:00	Affordable housing	Nomad (952)	PC World Chat

Post ID	Timestamp	Content	User
697950	2008-08-18 22:14:00	Oh :D What I found out was for the average person rent is better, because if you are 25yrs old and want a mortgage for 40yrs to 65yrs retirement you need to spend a bit more than $3k per month to pay it off just in time. If you are filthy rich, a) pay 100% cash and no rent to pay nor a mortgage to fuel or knock it out in a couple of years. I've sort of found that if you knock it out in 15yrs, paying around $6k a month that still might be a bit more than mortgaging but at least the house is your's and its not bad .. cos you pay a bit for that privilege or maybe it breaks even if you account for rent rises and stuff .. but I guess in a rough way rent rises may balance out with extra costs of house ownership like maintenance and rates etc. At a guess if you knock the mortgage out in 10yrs it might be cheaper than to rent for 40yrs to retirement. Althou renting and saving on the side require good dedication, if you have money available and you spend it cos you can .. then hey ..... The difference between renting and a mortgage is that in the first instance you are paying someone else's mortgage off (and thereby providing him/her with an asset) and in the second you are providing an asset for yourself. Yes, if you take a while to pay the loan off, it costs you in interest and fees (banks aren't in business to make friends) but what do you have after 30 years of paying rent? A big bag of nothing...	johcar (6283)
697951	2008-08-18 22:26:00	Is affordable housing not an oxymoron?	wratterus (105)
697952	2008-08-19 07:07:00	The difference between renting and a mortgage is that in the first instance you are paying someone else's mortgage off (and thereby providing him/her with an asset) and in the second you are providing an asset for yourself. Yes, if you take a while to pay the loan off, it costs you in interest and fees (banks aren't in business to make friends) but what do you have after 30 years of paying rent? A big bag of nothing... At the end, if you pay rent, its cheaper, if you have good dedication you can put aside funds to compound. For a couples. $400k loan for 40yrs might be around $1-1.2M in total roughly. Assuming interest rate at 9%. Paying around $3k a month. At the end of it you may have some savings but not much .. Instead if you paid rent for 40yrs and put say $2,000 ($500 weekly roughly) aside for savings that would compound to $2M on hand in 40yrs. Assuming interest rate at 3% over time.	Nomad (952)
697953	2008-08-19 07:15:00	Nomad, you seem to be talking about one person buying a house. I would have thought that a decent amount of people buying a house (not an apartment) would be couples. I did say average salaries and I did note for a couple, 2x of them working. For a average working couple, how easy is it to finance $6,000 a month every month and knock it out in 15yrs? For a $400k loan. If a couple takes 40yrs to pay the loan off say around $3,500 a month, then you are paying 300% of the original amount in total and have little other funds saved up at the side. Ok maybe you have some if you assume prices will rise and income ditto but I doubt it's as large as that $2M figure (above).	Nomad (952)
697954	2008-08-19 07:21:00	Then all those landlords must be losing money. If you have a family home and the rent is maybe $500 a week. Can that finance the mortgage? With my limited info what I think is, the rent will help the landlord to pay it off but they also need to dig in their own pockets to top it up and pay it off quick and then its worth it, also being a business they can factor losses with the accountant and gain from that ... The landlord might eventually have like 3 or 4 properties. If they are mortgaging the 4th one, they have 3 that is fully paid off. Thus they have 3x houses paying rent and the 4th one and his/her day job if any .. thus he/she can knock it out faster with more/more properties he/she have.	Nomad (952)
697955	2008-08-19 10:10:00	At the end, if you pay rent, its cheaper, if you have good dedication you can put aside funds to compound. For a couples. $400k loan for 40yrs might be around $1-1.2M in total roughly. Assuming interest rate at 9%. Paying around $3k a month. At the end of it you may have some savings but not much .. Instead if you paid rent for 40yrs and put say $2,000 ($500 weekly roughly) aside for savings that would compound to $2M on hand in 40yrs. Assuming interest rate at 3% over time. In my experience, expenses seem to expand to consume the available cash, so, although an extra $2K a months sounds great, in practice, I think most people would find it difficult to accumulate this without very strong willpower...	johcar (6283)
697956	2008-08-19 21:51:00	In my experience, expenses seem to expand to consume the available cash, so, although an extra $2K a months sounds great, in practice, I think most people would find it difficult to accumulate this without very strong willpower... The fact remains though. It needs thinking about. I am thinking of putting solar water heating in. If I were to borrow all of the 3.5k at say 9% and never pay it back,I would still save money,and on top of that electricity keeps going up.	Cicero (40)
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