- Joined: October 2006
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Re: Is now the time to buy a home or wait it out?
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Originally Posted by DaveF
That applies for ~7% interest rate, I think. I ran the numbers for my 5.3% rate, and it only saves about 5 years on the mortgage. And you compare that to investing the same money elsewhere, and it tends to work out better.
That said, there's an emotional aspect to paying off one's mortgage.
Adam -- WNY, indeed. What's happening in Saratoga to boost housing? Ah well. No earthquakes. No two hour commutes. No droughts.  |
Arguably, you can run the numbers and often make more investing the extra money somewhere at a higher interest rate. I'd say that's fine so long as you pay the mortgage off with it when the amounts intersect.
One important thing about paying off your mortgage is that it dramatically reduces your exposure to things like problems stemming from job loss and a bad economy. You have to sink a lot farther into the hole to lose a house you own outright than you do to lose one when you are mortgaged to the hilt.
Lay down your law books now, they're no damned good -- The Eagles
- Joined: January 1999
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Re: Is now the time to buy a home or wait it out?
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Originally Posted by DaveF
So what do people think about 5%, 10%, 20% down these days? When I bought, I bought a house for which I could pay 20% up front -- I wasn't going to have any PMI.
The past year, I've been paying a bit extra towards the principal, but
I'm realizing that doesn't make much financial sense. Do people do that these days: pay ahead on their mortgage to try and help reduce the long term mortgage? Three years ago, there was no point: you made more in appreciation just waiting. Unless you live in upstate NY where housing has been almost flat for 30 years...
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If it's a choice between paying a little extra on the mortgage and funding an IRA, then fund the IRA. If you've got a little extra to put into the mortgage after the IRA and other important things, go for it! If you intend to stay in the house it can only be a good thing.
Philip Hamm
Moderator Emeritus
- Joined: January 1999
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Re: Is now the time to buy a home or wait it out?
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Originally Posted by DaveF
It's really a matter of, I need a financial advisor The mortgage is paid on time. The 401k is funded. After that, is where do I put further savings and investments...CDs, extra principal on the house, mutual fund, etc. |
My financial advisor stresses the importance of having both an IRA and a 401(k). My statement of funding the IRA was assuming that both a 401(k) and an IRA are being funded.
Philip Hamm
Moderator Emeritus
- Joined: October 1999
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Re: Is now the time to buy a home or wait it out?
Update: We went back to the home for a 3rd viewing, while there we went ahead and made an offer of $92 p/sf versus the $112 p/sf asking price. So now the game begins...Round one.
Quote:
So what do people think about 5%, 10%, 20% down these days? When I bought, I bought a house for which I could pay 20% up front -- I wasn't going to have any PMI.
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In 2003 when we purchased our last home due to having good credit, we were able to finance 100% of the purchase price, we had to get PMI of course, in 2005 we tried to have our PMI removed and our home had proven substantial equity but our bank (CHASE!) after we paid $500 for an appraisal, would not budge because we were shy by like 2% of what they considered a safe amount of appreciation, WTF! Anyway in 2007 when we sold our home, it sold for almost double what we paid...I will never get PMI again, we plan to put 20% down on the next home we buy. And no more CHASE loans for us.
YMMV
Regards,
Toddcolor=blue>
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- Joined: October 1999
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Re: Is now the time to buy a home or wait it out?
Our seller countered our initial offer with a reduction of $8500 and that was all she had in her so we walked away from the table. Looks like she may have more in it than it may currently be worth?
Oh well, bring on more listings.
Regards,
Toddcolor=blue>
My Blue-Ray & SD DVD's Current HT setup: Vizio P50HDTV20A 50" Plasma, Pioneer VSX1015TX 7.1, DirecTV HR20-100 HD DVR, Panasonic DMP-BD10 Blu-Ray, SVS 2531PCi sub, Polk R30 mains, Polk CS125 center, Polk R15 x4 rears
- Joined: October 1998
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Re: Is now the time to buy a home or wait it out?
Here's the link to an interesting set of US maps, by individual county, showing housing and other economic parameters (e.g. employment). Maybe this will help your thought process. (PDF format.)
http://online.wsj.com/public/resourc...df?mod=WSJBlog
Feline videophiles Susie and Dukie.
