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"Homeowner" is the new stigma. "Renter", bitter or not, no longer a stigma.
It will be interesting to see what happens since the allure of homeownership is and will be sadly ruining many peoples financial lives. If they had been renting instead things would have been completely different.
I prefer the word homedebtor. Tis me :-(
yes, my ownership is fractional except on 2. but nothing sounds sweeter than total payoff. haha
Next to get paid off is auto's (as they have the highest interest rate). and I want to keep them till they quit.
I love having something to hold onto. i'm trying to get my wife to gain some weight. haha joking.
there is such thing as home equity. People, including myself could refi (I just heard a screeching sound) and pull out some home equity. Which is very real.
"there is such thing as home equity. People, including myself could refi (I just heard a screeching sound) and pull out some home equity. Which is very real."
*knocks on Jarrod's forehead*
Anybody home?
haha, and thus it begins.
wait I quit. I've beat my head against this sump b4.
Someone said up there 'paid off' is great. But in some areas that means bad use of your money.
Let's say you have a $700k house paid off, and live in it. You have this big expensive asset and it does nothing for you.
Now if you got a mortgage in 2002, you could easily have a 4.8% fixed rate (I have one). I rather pay that small mortgage and have more cash available for investing. There are investments that yield over 5%. I will not even go into the tax advantages of having a mortgage.
It does give piece of mind when it is paid off, but it is also 'lazy money'.
hmpf. my original post was longer and provided more numbers, thus the number of $700k. Zillow refused to post my comment. Maybe I had 'offensive/ obscene numbers' ? Never mind, Zillow.
We bought before the peak with a normal mortgage and have home-held (?) for 7 years. We have equity and refied but did not pull anything out, just changed rates from 7% to 5.something.
What does that make us? I wouldn't call us debtors. We have the money to pay off the mortgage. We'd rather have the cash for now and keep making payments. We have no other debt, no credit cards, student loans, or car payments.
We have lots saved for retirement, and have the kids college most likely paid for (depending on what inflation does to the cost of tuition).
Not bad for 33 yars old.
The intrest we make off the savings is quite close to what our finance rate is. While we could own free an clear with the prices dropping I am confident in keeing the assests in liquid form.
I'm not bragging, just don't like it assumed that becasue we have a mortage that we are in over our heads.
"..just don't like it assumed that becasue we have a mortage that we are in over our heads."
Yes bubba this would be a brush much too broad. I'm under the impression that this topic is more about folks who have a mortage and have pissed away what equity they did have via HELOC etc...
What is worse is tha those that did make those choices acted like my husband and I are the biggest cheapskates. I know a lot of those (even though they won't admit it) that have brand new kitchens and great pictures from their overpriced vacations who cannot afford to blow their nose right now.
PerhapsIndentured Occupant
-In a largely cash-poor society, indenture provided a way for those unable to pay for an expensive purchase to trade a period of their labor to another, who would pay for the purchase-
Make no mistake -- you hold the deed, you are a homeowner. The lender just has the rights of a lienholder, and as long as you uphold your end of the bargain (pay the note), their rights are limited to just collecting what they're owed. They don't decide what color to paint the house, how to landscape, what to charge the tenants.
Gordon: you may want to duck............
As long as I pay my rent on time I have a roof over my head too...........and rent will never out-pace homes prices......I repeat, my rent will NOT be higher than what I would have to pay on a mortgage to purchase a home. In fact when the house prices fall down rents will fall down to because they stay almost in tandem in reasonable markets and we are falling back down to one. How about this: I will ask the landlord if I can paint a room another color........I bet he will say no problem, I can always paint it back when I leave........how many homeowners are painting the heck out of their homes just to neutralize them so they may sell them.........HA HA....
Hey, and thanks Gordo, I had never thought of it that way..........OMG.......I may pull out my paint supplies and get my creative cap on!!!!!
3Girlsva, I am right there with ya. Love'n the bang for the buck. Huge house, gardener, country club pools... all paid for by rent that is a fraction of what a mortgage would cost. We renters are few and far between though. I met another renter Mom this week and she said we rent and a feel weird about telling people about it. I looked at her and said "I know you don't have to explain." As Klarek said above, that stigma will go soon and we will be the geniuses.
Gordon, you are very naive. Or maybe you are just drinking the Koolaid like the rest of the industry.
Peter Tiemann "... blah blah blah...I will not even go into the tax advantages of having a mortgage."
You're not too bright. Let's say you have $100K @ 4.8%. You'll pay $4800 in interest but (assuming you're in a 35% bracket) actually go $3120 out of pocket.
You invest in a 5% MM (Let's not talk about "investing" because it's not a sure thing). You get $5K on that $100K, but only put $3250 in your pocket after CG.
So you've taken out a $100K mortgage to net $130 a year.
Wait. That's not fair, because no one buys a $100K home, right? Let's say we're talking about a million. So you made $1300. That sounds better. Unfortunately, you probably paid 2% closing costs. So now, you've got $20K in closing costs in your basis. That $1300/yr investment strategy is looking sweet now, isn't it?
Enjoy your Koolaid.
Renting or owning it doesnt matter in the long run. Just do what works for you so you can live a comfortable happy life , have some fun while you can, and try to save some money along the way so you dont have to work till your in your eightys eatting cat food, on food stamps.I own My place free and clear but if I decided not to pay my property tax then Coos county court house would own my house not me. You never really own anything. Your always indebted to someone always.
Well said julia!
aengington, If you make enough to buy a $1M house then the Alternative Minimum Tax starts to erode the tax benefits of writing off interest.
3Girls, I don't know where you got the idea I was knocking renting. No question, tenants' rights to their home are indeed similar to an owner's rights as far as possession. And yes, in most markets it's way cheaper to rent a house than it is to own that same house. And absolutely, renting is by far a better option than owning for many people.
My point was that unless you hold a really long term lease on your home, as a tenant, your rights are terminable or at least subject to change beyond your control once your lease is up. You can be made to leave your home. The landlord may sell at the end of your lease, move into the home themselves, increase the rent to whatever level they choose (even if it's beyond what the market might bear).
As an owner, your lender can't do that -- they can't kick you out (if you're complying with the loan terms); they can't increase your payments (on a fixed rate loan). Sure it costs more. Sure it's maybe not a great investment in many cases. But it's your home.
"They don't decide what color to paint the house, how to landscape, what to charge the tenants".
Scare tactic of the NAR about how your rent will go up, you are not able to do anything, yada yada..........meant to make you feel tense about the perilous situation that renting is.
Lucky for me I rent from someone who owns many homes and rents them out, this home for him has never been anything but a rental. He bought when prices were much lower so I have a sense of security in that. My lease is up in July and we have already started talks about renewing our lease, and if we don't like the price, no biggie-there is another home nearby for $200 less a month for the same space.......my kids have parents who love them......moving won't effect them much, after all do people tell military that their kids will be screwed up if they rent and have to move when the lease is up.
Julia: good post, I have said time and time again! By the time most people have their homes paid off the taxes are almost as high as the house payment was to begin with, or at least on Long Island it is.
akka - I'm well acquainted with the ridiculousness called the AMT... but I was trying to keep it simple for Peter.
... and, it's free and anonymous
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Are you still a homeowner even if you don't actually own anything?
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Losing Their Grip on Homeownership
NEW YORK -- Homeowners started losing hold of their homes years before spiking foreclosures and the housing slump slammed the economy.
Piece by piece, some gave away part of their homes by tapping equity to take cash out to pay for cars, weddings and vacations. Others never owned one brick. During the country's most recent housing boom, the term "homeowner" threatened to become a misnomer as lenders offered 100 percent or more financing to some buyers. ...
"Some economists said the home-equity number will drop below 50 percent by the end of next year, marking the first time homeowners will owe more than they own since the Fed started recording the data, in 1945."
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