after the match...

[pgg]

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For those of you who plan to buy, where are you going to get money for the down payment?

100% financing might be hard to find these days. My credit union still offers it, but the rates are 2+ points above what a conforming loan with 20% down would get you. (Still, from a historical perspective, 6.5% isn't bad.)

FHA loans only require 3.5% down IIRC.

Most other closing costs can be rolled into the loan, which may or may not be a good idea, depending on your situation.

As for this response... You totally missed the point. If you had 200k in the bank right now and bought a home, yeah you probably will make money in 10 years but that is not what I was trying to prove. The problem is the LOAN. Market appreciation of home value has to exceed to the overburden of INTREST that you have to pay to borrow that money to begin with. On a 30 year loan, it takes 20 years until you start paying equal amounts of intrest + principle. That means the first 20 years your paying well over the majority of your payment into intrest. Home prices are still deflating, meaning we haven't even reached a bottom yet, let alone home appreciation. How will this offest the intrest you payed all those years? You'll dig yourself in a hole if you take out a loan and buy now, trust me.

I think we're talking past each other.

I've said about 73 times now that the point of owning rental property isn't the appreciation of the property. On average, over the long run, real estate values generally track inflation. You can get a zero-risk CD at your bank that will probably keep up with inflation. The difference is that YOU pay for the CD, but a RENTER pays for the real estate.

The point is that someone else is buying the property for you over many years. I could not possibly care less if it takes 20 years of renting to reach the point where the renter is paying as much principal as interest, because the renter is paying for it. (It's also worth mentioning that 20 years in, you should have positive monthly cash flow, since rent can almost surely be raised, but your mortgage costs are fixed.)

Finally, I would suggest that one shouldn't take investment advice from someone whose argument boils down to repeated exhortations to "trust me" ... or someone who can spell neither interest nor principal. 🙂

 

[RxBoy]

Debating is useless... A video is worth a 1000 pictures. Enjoy!

[youtube]http://www.youtube.com/watch?v=bNmcf4Y3lGM[/youtube]

 

[pgg]

Debating is useless...

The video is amusing ... sort of ... but thoroughly irrelevant to everything else discussed in this thread.

Der Video Fuhrer "buys" a house with an adjustable rate mortgage based on falsified documents with the intent of flipping it after spending bubble equity on toys, and this somehow supports your assertion that no one should buy a home because the market is down over the last year?

🙄

Can you really - really - not tell the difference between get-rich-quick ARM flippers and someone who buys a house to (1) live in, and (2) keep as a rental for 20 or 30 years while paying off a mortgage fixed at under 5%?

Are you really - really - suggesting that you, by virtue of having "followed the market for too long" can actually time either the real estate market (you say DON'T BUY NOW, "trust me") or the stock market (find a good fund at "8 percent or so per year")?

Maybe you're right, and debating is useless. But I'll still rent to you. 🙂

 

[RxBoy]

The video is amusing ... sort of ... but thoroughly irrelevant to everything else discussed in this thread.

Der Video Fuhrer "buys" a house with an adjustable rate mortgage based on falsified documents with the intent of flipping it after spending bubble equity on toys, and this somehow supports your assertion that no one should buy a home because the market is down over the last year?

🙄

Can you really - really - not tell the difference between get-rich-quick ARM flippers and someone who buys a house to (1) live in, and (2) keep as a rental for 20 or 30 years while paying off a mortgage fixed at under 5%?

Are you really - really - suggesting that you, by virtue of having "followed the market for too long" can actually time either the real estate market (you say DON'T BUY NOW, "trust me") or the stock market (find a good fund at "8 percent or so per year")?

Maybe you're right, and debating is useless. But I'll still rent to you. 🙂

I'll surely pay your interest on that property while you make equity. Just as long as I don't have to worry about it every time the furnace breaks.

 

[deleted126335]

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