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| Thread ID: 76883 | 2007-02-19 08:13:00 | $$ Morgages | dots (24) | PC World Chat |
| Post ID | Timestamp | Content | User | ||
| 525803 | 2007-02-21 13:59:00 | It is almost as if it is cheaper to rent for the rest of your life. A $300,000 mortgage on a very average house for 30 years is $1,000 per fortnight. You can probably rent a house worth $100,000's more for only $300 per week. Rentals (www.trademe.co.nz) You then have $400 per fortnight over to save for your retirement, or clear your student debt. In 30 years at a real rate of return of 2.5% that would be $462,000. Not a bad nestegg. So what is your income? I rent a three bedroom home on a 1/4 acre section for $120 per week. I don't and never had had a student loan. I can't afford $300 per week for rent. The first mortgage I had was in Rotorua and $25,000 in 1976. Second house was in 2004 for $20,000 and cost $85 per week for 5 years. 30 years of mortgage plus rates plus insurance plus if you need to move plus if your partner decides to walk out taking half of everything and anything else that may go wrong. |
Sweep (90) | ||
| 525804 | 2007-02-21 18:56:00 | Thanxs for the input people, has opened up the ideas a bit better on what i should or could aim for........ One income family in this instance. Thanxs for the link Jen..i got that calculator to work.....sadly.:( makes it a bit more reality of not happening at this point. Deposit being my biggest prob at this stage. the 20% bit kills me at the moment. but i have time and i can save. Still interesting to hear other points and information from people tho..... Thanxs :) |
dots (24) | ||
| 525805 | 2007-02-21 19:36:00 | It is almost as if it is cheaper to rent for the rest of your life . A $300,000 mortgage on a very average house for 30 years is $1,000 per fortnight . You can probably rent a house worth $100,000's more for only $300 per week . Rentals ( . trademe . co . nz/Browse/SearchResults . aspx?searchType=all&searchString=rent&x=21&y=14&searchRegion=2" target="_blank">www . trademe . co . nz) You then have $400 per fortnight over to save for your retirement, or clear your student debt . . But rent never goes down, it goes up . Forever . Your mortgage goes down . And what your payments are and the total left owing becomes laughable after a time . We bought our first house for $23,500 . Of course, it helps if you stay in it for ages if not forever . |
pctek (84) | ||
| 525806 | 2007-02-21 22:00:00 | But if you pay rent you will not need to insure the house, pay for maintenance of the house, pay the rates & etc . You need to insure the contents of the house . If you rent a house you are most certainly paying the rates, property insurance and maintenance, plus the owner's profit, all through your weekly rental . In addition, the owner is getting the capital gains and the taxation benefits . I bought my house in 1981 for $33,500 (worst house in the best street) and paid it off in full in four years on a tradesman's wage . I married a few years later and remortgaged for renovations and extensions costing a total of $140,000 over several years . Only half of that was funded by a mortgage, the rest was savings plus the equity my wife brought into the marriage (she had been saving for a house) . We paid that mortgage off in full over 6 years, so I estimate our total capital investment was a shade under $200,000 inclusive of interest . That works out to about $385 per week over 10 years . Current market valuation is a minimum of $650,000 which equates to a net capital gain of $450,000, or the equivalent of nearly $350 per week (tax free) over 25 years . Some home buyers live beyond their disposable income, remortgaging as the value of the propety rises and blowing the cash on holidays, flash cars boats and high living . At the end of the day they have no equity in their home, it all belongs to the banks and they have been renting it from them at exhorbitant prices . Go figure! The average person renting over the same period of 25 years would be unlikely to have anything much to show for it, much less an appreciating $650,000 asset . There would be very few renters who would not live to the limit of their disposable income so the concept of saving $400 per fortnight is a dream for all but the most dedicated of savers, and they are the ones who should be buying a house . Unless you need to release capital for the purchase or expansion of a profitable business, owning your own home is one of the best investments that the average man, woman or couple can make, and they are still free to invest surplus income elsewhere if they wish . Yes, there will always be exceptions, but I am talking about the average person here . Cheers Billy 8-{) |
Billy T (70) | ||
| 525807 | 2007-02-22 00:22:00 | There is not a lot of advantage of renting a house as oppose to owning one. Unless you like to move from place to place frequently. House insurance is like 300 odd bucks a year, hardly anything. Rates is around $1500 a year for an average house. Environment Rate is around $300 a year. Maintenance costs is very variable. The capital gain of owning a house over a period of time will outrun all the expenses incurred. |
SKT174 (1319) | ||
| 525808 | 2007-02-22 01:13:00 | The only real consideration in buying a house, (or anything else on HP) is how much can I realisticly afford to pay each week or month. On the rent v own subject. You can probably rent at about half the monthly mortgage payment. After 30 years yoy may have a freehold home worth several hundred thousand dollars. But what good is it to you. Your kids have probably grown up and left home. The house is probably too big for you. So you sell it and downgrade. At least if you rent, you have had extra money to spend when you are young enough to enjoy it. I have rented all my life. I have probably lived in over 20 different towns. I have had numerous overseas trips to all major countries. I have always been able to do whatever I wanted to. If I had bought a house all those years ago I would probably have a major freehold asset. But could I do with it? Sell it? Then what? I have friends who bought a house fourty years ago, who have hardly ever been out of their home town. They envy my life style. I hate theirs. |
JJJJJ (528) | ||
| 525809 | 2007-02-22 03:12:00 | Isn't the average house price now $350,000 ? So, If you were to buy an average house now, you would need $300,000 mortgage. People are dreaming if they think that in 30 years time their $30,000 house in 1981 (now valued at $650,000) is going to $2-3 Million. There has simply being a spike of house prices in the last 5 or so years and it will either fall or likely stay extremely flat. So don't bank on Capital Gain for the long term. If you are not sure read "Pension Panic" by Gareth Morgan, really scarer reading. |
KiwiTT_NZ (233) | ||
| 525810 | 2007-02-22 04:21:00 | After 30 years you may have a freehold home worth several hundred thousand dollars . But what good is it to you . Your kids have probably grown up and left home . The house is probably too big for you . So you sell it and downgrade . Reverse-equity mortgage, no repayments, travel wherever you like, live it up, and hopefully when you shuffle off this mortal coil there's just enough equity left there to fry or bury the remains and throw a party for the mates who outlived you . I plan to leave here feet first (eventually) . That's what good it is to you, it will take me & Mrs T quite a few years to burn through what will be close to $1,000,000 of equity by the time we decide to retire . Besides, I freeholded in 4 years the first time and 6 years the second . Granted it might be a bit harder to do that now, but 15 years is a realistic expectation and it can be done without sacrificing your life . The more you pay now, the less you pay later, a simple equation that many people fail to grasp . Part of that time interest rates were as much as 20% and 12% was a minimum, so if I'd let the mortgages run their course I'd have paid anything up to $100,000 extra in interest over the full term of the loans . Cheers Billy 8-{) |
Billy T (70) | ||
| 525811 | 2007-02-22 21:46:00 | Reverse-equity mortgage, no repayments, travel wherever you like, live it up, and hopefully when you shuffle off this mortal coil there's just enough equity left there to fry or bury the remains and throw a party for the mates who outlived you. I plan to leave here feet first (eventually). That's what good it is to you, it will take me & Mrs T quite a few years to burn through what will be close to $1,000,000 of equity by the time we decide to retire. Be wary of reverse-equity mortgages (articles.garethmorgan.com) A glance at some calculations illustrates. Say you’re aged 65 and you borrow 20% of the value of your house. After the set-up fee of 4% of the house, you get to spend 16%. At the current interest rate and assuming house price inflation matches only general inflation (not a silly assumption giving the number of ageing baby boomers), your remaining equity will be reduced to a half of the house’s value by age 77 and to just 22% by age 83. |
KiwiTT_NZ (233) | ||
| 525812 | 2007-02-23 01:36:00 | After 30 years yoy may have a freehold home worth several hundred thousand dollars. But what good is it to you. Your kids have probably grown up and left home. The house is probably too big for you. So you sell it and downgrade. It doesn't take 30 years. Yes the bank initially lends for around that long but after say 15 to 20, your repayments are nothing and you can pretty much get rid of them by then. Or yes, you downgrade. I sold our Auckland house for nowhere even near as much as Billy Ts overpriced mansion, and it still left us debt free with our new one here. Which by the way is considerably bigger and nicer than the other........ |
pctek (84) | ||
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