That's why you don't do a 30 year mortgage breh. 15 year fixed at least then try to pay it off early. If you do your homework the house will be worth more than when you bought it.
Forget the American Dream—Renting, Not Homeownership, is the Path to Financial Freedom
- Thread starter Responsible Allen Iverson
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That's why you don't do a 30 year mortgage breh. 15 year fixed at least then try to pay it off early. If you do your homework the house will be worth more than when you bought it.
This whole thing is wrongFirst of all $400K is high for somebody with no money. But to make it COMPARABLE, let's say you are deciding between renting for $2,500/month or buying a $400K house. Let's say that in 5 years you want out:
Rent - $2500/month x 12 months x 5 years = $150,000 in rent ()
Mortgage - $2500/month x 12 months x 5 years = $150,000 PITI (principal, interest, taxes, insurance)
Let's say you were in a fully amortizing 30 year loan of $400K, here's how your balance looks (courtesy of LOAN AMORTIZATION SCHEDULE - Year By Year Display)
Year 1: $394,359.79
Year 2: $388,416.24
Year 3: $382,153.03
Year 4: $375,552.97
Year 5: $368,597.95
So even if your property value didn't change just based off the numbers alone you are saving $30K off the rip. And look at 10 years:
Year 6: $361,268.88
Year 7: $353,545.64
Year 8: $345,407.02
Year 9: $336,830.69
Year 10: $327,793.12
By year 10 the numbers are even more substantially different. You have $70K+ in equity off payments alone. And by year 10 you would have made $300K in rental payments (
First lets say you're buying a 400k house with 20% down That's $80,000 off top
Then lets say your mortgage is 2500 and rent is 2000...
Now let's say you invest the 80,000 and the $500 every month and get a 12% return
Then lets compound that for 30 years and you get $3,844,789.88
Even if you only get a 9% return you will end up with 1,879,259.51
in 30 years your house will be paid for and with inflation it might be worth about $700k...
Property tax on a 400k house is about 11-12k
1) You can get a 3% loan with Fannie Mae, plus first time homebuyer assistance.
2) If you get 20% down, your mortgage payment is not $2,500/month unless your credit is in the pits, it would be closer to $1,800-2,000
3) Where are you consistently getting a 12% return over 30 years without risk?
4) Where are you going to get a compounded return of 12% over 30 years without significant risk?
5) Where are you going to get a 9% compounded return over 30 years without significant downside risk?
If you are broke and/or have bad credit yes you have no business being a homebuyer. But if I have $80K to invest I buy a home 10 times out of 10.
You're stupid1) You can get a 3% loan with Fannie Mae, plus first time homebuyer assistance.
2) If you get 20% down, your mortgage payment is not $2,500/month unless your credit is in the pits, it would be closer to $1,800-2,000
3) Where are you consistently getting a 12% return over 30 years without risk?
4) Where are you going to get a compounded return of 12% over 30 years without significant risk?
5) Where are you going to get a 9% compounded return over 30 years without significant downside risk?
If you are broke and/or have bad credit yes you have no business being a homebuyer. But if I have $80K to invest I buy a home 10 times out of 10.
Really?
I bought my house for 165k four years ago... it's valued at 215k now.
Even if I can't sell it for full value, I'd still make at least 20-30k profit off of it.
Not sure where you're getting your numbers from but here we go.
First, before buying a home, you should be in good financial health. Yeah if you buying a 400k home, you want 20% down (80k) to avoid PMI/MIP. You should at least have 10%, which would allow you to do a 80/10/10 loan, thus avoiding PMI/MIP.
I've already said you shouldn't do 30 year mortgages. At least if you do get one, have a plan to pay it off early, thus avoiding a lot of interest. Ideally, a 15 year fixed mortgage is better, and you get a lower interest rate with 15 year mortgages too. And try to pay that off early too.
Not saying renting is bad, but understand it's typically the step you take before you're ready to actually own a home. Because yeah owning a home can be expensive. Repairs can be expensive, thus being in a good place financially (emergency fund, little debt, etc). But there's obvious tax benefits to owning a home, and yeah you're gonna own a valuable piece of real estate owning a home. Not to mention there's psychological benefits of owning your dwelling, especially if your at a stage of raising a family, building stability.
Renting has its benefits no doubt, and really because people don't prepare adequately and jump into homes they can't afford, more people should probably be renting, at least until finances can be in order, and better understanding of affording a home can be learned.
Regarding your numbers they don't make sense though. You're making up a 12% return, even the 9% return, which is impossible to guarantee for any investment, whether it's annually or 30 years. There isn't a credible financial expert that can guarantee any kind of return for investing. One year you might get 20%, one year you'll drop 20%. Typically the market on average is around 8-10% but there's peaks and valleys over decades dictating that.
If you want to invest 4-500 a month and see how compounding interest can work then do a Roth IRA (backdoor roth if you're ballin) and pick funds with solid histories and low expense ratios. But again there's no guarantee of what return you're going to get, especially yearly or over 30 years.
Didn't read your whole post but I'm gonna tell you if you look around there are funds that averaged over 21% since 2009... People want you to tell them where to find it instead of looking.
I believe in buying apartments.. start off with 2 family then go buy a fukking building. Single family units... lol
Seriously homebuying isn't for everyone. But overall it's a positive purchase both dwelling wise and investment wise if you do your homework.
Again there isn't a single fund that will give you a guaranteed return breh. No finance expert can guarantee it not predict it. A fund can average 20% one year then drop the next. You invest long term to minimize risk but over time it's peaks and valleys. Hell warren buffet challenged any financial expert over time to beat the normal market and they couldn't do it lol
Because most people ignored it.. Not like they actually compared top funds to the market.. Buffet himself beat the market..
breh there's no funds out there that guarantee a 12, 20, or even 9% return. You can win in the long run over an average, but you cannot guarantee a percentange of return.
Buffet is basically his own brokerage house. And again he posted the challenge, knowing that at least 95% of experts cannot consistently beat the market, much less guarantee a certain return.
Even buffet believes in responsible home ownership
https://www.google.com/amp/www.cnbc...ren-buffett-thinks-you-should-buy-a-home.html
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Lady asked him why did he have a mortgage and not pay off the house he said "because i took the extra money and bought stock and that stock is worth 750 million today." Man you gotta be retarded to post this video..
This guy has been living in the same house since 1958... If housing was all that why didn't an INVESTOR invest in more housing...
Lady asked him why did he have a mortgage and not pay off the house he said "because i took the extra money and bought stock and that stock is worth 750 million today." Man you gotta be retarded to post this video..
This guy has been living in the same house since 1958... If housing was all that why didn't an INVESTOR invest in more housing...
Looks like the epitome of frugality
Not everybody wants a big azz house. 
And as far as Buffet not investing in real estate:Warren Buffett’s business buys KC area’s largest home builder
Not to mention he owns one of the biggest real estate brokerages in the country.
Looks like the epitome of frugality
Warren Buffett’s business buys KC area’s largest home builder
Not to mention he owns one of the biggest real estate brokerages in the country.
the stupid shyt y'all post
You said he didn't invest in real estate, I showed AS ONE EXAMPLES OF MANY, he invested in the biggest homebuilder in a metro area yet you claim that this is "stupid shyt" ?
Somebody get this guy some Tylenol-3 he needs to relax 
Berkshire, Goldman Sachs, CalPERS, all are heavily invested in real estate. We need land to live on, and they aren't making more of it. It is what it is breh take the L and please don't one yourself 