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Misc homeowners: should I buy my first house on full cash?
07-16-2023, 08:43 PM
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#31
Originally Posted By LogicalLifts⏩
I've talked to lot of people about this and nobody ever considers taxes, cash flow or riskBecause the discussion on this board is rarely scientific enough. It's much better over at Bogleheads.
Here large, sweeping comments are made about entire countries without a care for the basic principle in property investments: location, location, location.
It's how you can separate the LARPers from the actual property investors, btw. Rather easily.
Here large, sweeping comments are made about entire countries without a care for the basic principle in property investments: location, location, location.
It's how you can separate the LARPers from the actual property investors, btw. Rather easily.
I think because paying off a house early is not cool or sexy. It's the plain, boring way to do things
In reality, paying off your house at say 45 and maxing out your 401k at a young age is all you need to live very very comfortably. Most people fail at finances because they try to be too cutesy. One of my old co workers was a 50 year old black guy whose broke. He's a maxed out 600 credit score despite making 100K+ for the majority of his life. He's always done one stupid thing after another. If he just lived conservatively, he could have been in a great position
07-16-2023, 08:49 PM
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#32
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Originally Posted By ATB161⏩
it's an interesting prospect for sure, paying off a home early. I'd imagine if I bought a $1M home by 40 and put $500k down, could probably pay off the home by the time I was 45. At that point if combined income is $300k or so, we would have kids that are between 5-10 years old, with house paid off.. all that income would pretty much go to savings.I've talked to lot of people about this and nobody ever considers taxes, cash flow or risk
I think because paying off a house early is not cool or sexy. It's the plain, boring way to do things
In reality, paying off your house at say 45 and maxing out your 401k at a young age is all you need to live very very comfortably. Most people fail at finances because they try to be too cutesy. One of my old co workers was a 50 year old black guy whose broke. He's a maxed out 600 credit score despite making 100K+ for the majority of his life. He's always done one stupid thing after another. If he just lived conservatively, he could have been in a great position
I think because paying off a house early is not cool or sexy. It's the plain, boring way to do things
In reality, paying off your house at say 45 and maxing out your 401k at a young age is all you need to live very very comfortably. Most people fail at finances because they try to be too cutesy. One of my old co workers was a 50 year old black guy whose broke. He's a maxed out 600 credit score despite making 100K+ for the majority of his life. He's always done one stupid thing after another. If he just lived conservatively, he could have been in a great position
Thing is, I've never been a fan of early retirement. We aren't meant to sit around rotting and taking things easy, humans are meant to chase goals. I know people who started poor and paid off their $1M homes in their 40s but are still working in their 50s.
What happens if there's a freak accident and the house burns down or there's a tornado or something? Does insurance pay out? One more thing to think about. If not, all that equity is a waste.
07-16-2023, 08:52 PM
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#33
Originally Posted By sam212⏩
I have zero debt and zero credit score. I'm pretty sure you can't have a high credit score and be debt free, a credit score is based on your ability to repay debt, so what you're saying doesn't make sense.All three credit scores are over 800. Zero debt and decently high income.
Don't put that on me Ricky Bobby, don't you ever put that on me.
07-16-2023, 08:53 PM
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#34
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Originally Posted By Bando⏩
he pays off his revolving debt on timeI have zero debt and zero credit score. I'm pretty sure you can't have a high credit score and be debt free, a credit score is based on your ability to repay debt, so what you're saying doesn't make sense.
07-16-2023, 08:54 PM
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#35
Originally Posted By Crazy_Desi⏩
Of course house insurance pays everything. Why else have insurance? That's a very dumb question, no offenseit's an interesting prospect for sure, paying off a home early. I'd imagine if I bought a $1M home by 40 and put $500k down, could probably pay off the home by the time I was 45. At that point if combined income is $300k or so, we would have kids that are between 5-10 years old, with house paid off.. all that income would pretty much go to savings.
Thing is, I've never been a fan of early retirement. We aren't meant to sit around rotting and taking things easy, humans are meant to chase goals. I know people who started poor and paid off their $1M homes in their 40s but are still working in their 50s.
What happens if there's a freak accident and the house burns down or there's a tornado or something? Does insurance pay out? One more thing to think about. If not, all that equity is a waste.
Thing is, I've never been a fan of early retirement. We aren't meant to sit around rotting and taking things easy, humans are meant to chase goals. I know people who started poor and paid off their $1M homes in their 40s but are still working in their 50s.
What happens if there's a freak accident and the house burns down or there's a tornado or something? Does insurance pay out? One more thing to think about. If not, all that equity is a waste.
07-16-2023, 08:54 PM
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#36
Originally Posted By Bando⏩
Not trueI have zero debt and zero credit score. I'm pretty sure you can't have a high credit score and be debt free, a credit score is based on your ability to repay debt, so what you're saying doesn't make sense.
Have credit cards and just pay everything on time with 0 balance. You'll have 800 score
07-16-2023, 08:55 PM
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#37
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Originally Posted By ATB161⏩
insurance will find any reason to not pay out. there are always clauses in there that fuk over the policy holder. not a dumb question.Of course house insurance pays everything. Why else have insurance? That's a very dumb question, no offense
look at car insurance, medical insurance, life insurance, etc.. all try to find reasons to not pay out.
07-16-2023, 08:58 PM
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#38
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Originally Posted By Crazy_Desi⏩
Yeah, the average wagecel isn't really intended to "retire early". If a person has been an entrepreneur their entire life, it's dooable as they typically have different business ventures that can be maintained during later years while still working fewer hours.it's an interesting prospect for sure, paying off a home early. I'd imagine if I bought a $1M home by 40 and put $500k down, could probably pay off the home by the time I was 45. At that point if combined income is $300k or so, we would have kids that are between 5-10 years old, with house paid off.. all that income would pretty much go to savings.
Thing is, I've never been a fan of early retirement. We aren't meant to sit around rotting and taking things easy, humans are meant to chase goals. I know people who started poor and paid off their $1M homes in their 40s but are still working in their 50s.
What happens if there's a freak accident and the house burns down or there's a tornado or something? Does insurance pay out? One more thing to think about. If not, all that equity is a waste.
Thing is, I've never been a fan of early retirement. We aren't meant to sit around rotting and taking things easy, humans are meant to chase goals. I know people who started poor and paid off their $1M homes in their 40s but are still working in their 50s.
What happens if there's a freak accident and the house burns down or there's a tornado or something? Does insurance pay out? One more thing to think about. If not, all that equity is a waste.
But a person used to punching a clock for 40 years all of a sudden doing nothing? It's a lot of golf.
07-16-2023, 09:02 PM
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#39
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Originally Posted By Bando⏩
Do you have a credit card? Do you use it? I do, I use it and pay it immediately.I have zero debt and zero credit score. I'm pretty sure you can't have a high credit score and be debt free, a credit score is based on your ability to repay debt, so what you're saying doesn't make sense.
07-16-2023, 09:04 PM
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#40
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Originally Posted By ATB161⏩
"Nobody ever"? I can assure you that successful Lords of the Land do.I've talked to lot of people about this and nobody ever considers taxes, cash flow or risk
I think because paying off a house early is not cool or sexy. It's the plain, boring way to do things
In reality, paying off your house at say 45 and maxing out your 401k at a young age is all you need to live very very comfortably. Most people fail at finances because they try to be too cutesy. One of my old co workers was a 50 year old black guy whose broke. He's a maxed out 600 credit score despite making 100K+ for the majority of his life. He's always done one stupid thing after another. If he just lived conservatively, he could have been in a great position
I think because paying off a house early is not cool or sexy. It's the plain, boring way to do things
In reality, paying off your house at say 45 and maxing out your 401k at a young age is all you need to live very very comfortably. Most people fail at finances because they try to be too cutesy. One of my old co workers was a 50 year old black guy whose broke. He's a maxed out 600 credit score despite making 100K+ for the majority of his life. He's always done one stupid thing after another. If he just lived conservatively, he could have been in a great position
There are two schools of thought on 'paying off a house early', between the "I'm comfortable leveraging debt" and the "I benefit psychologically from not carrying loans". It's a subjective discussion in a sense but the latter category has a normative force there - if folks' health suffers when having a loan, then the benefit from paying off the loan earlier outweighs other considerations, including associated penalties. For the "leveraging debt" crew, it becomes easy to put X deposit down and take Y loan, and calculate a rental price (having researched this thoroughly) which will pay off the loan amount, income tax (e.g.) on rental income, upkeep/maintenance, etc.
And the fact that some on this forum assume that this is impossible is the coping mechanism I refer to. And most fail at finances because they never really think it through. They were born and raised to make excuses rather than to try to overcome. They fundamentally lack the resilience and emotional maturity to progress.
07-16-2023, 09:25 PM
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#41
Originally Posted By LogicalLifts⏩
The leveraging game is finished. Leveraging was great when you could get a 2.5% mortgage for 30 years, not at 7%. It makes zero sense"Nobody ever"? I can assure you that successful Lords of the Land do.
There are two schools of thought on 'paying off a house early', between the "I'm comfortable leveraging debt" and the "I benefit psychologically from not carrying loans". It's a subjective discussion in a sense but the latter category has a normative force there - if folks' health suffers when having a loan, then the benefit from paying off the loan earlier outweighs other considerations, including associated penalties. For the "leveraging debt" crew, it becomes easy to put X deposit down and take Y loan, and calculate a rental price (having researched this thoroughly) which will pay off the loan amount, income tax (e.g.) on rental income, upkeep/maintenance, etc.
And the fact that some on this forum assume that this is impossible is the coping mechanism I refer to. And most fail at finances because they never really think it through. They were born and raised to make excuses rather than to try to overcome. They fundamentally lack the resilience and emotional maturity to progress.
There are two schools of thought on 'paying off a house early', between the "I'm comfortable leveraging debt" and the "I benefit psychologically from not carrying loans". It's a subjective discussion in a sense but the latter category has a normative force there - if folks' health suffers when having a loan, then the benefit from paying off the loan earlier outweighs other considerations, including associated penalties. For the "leveraging debt" crew, it becomes easy to put X deposit down and take Y loan, and calculate a rental price (having researched this thoroughly) which will pay off the loan amount, income tax (e.g.) on rental income, upkeep/maintenance, etc.
And the fact that some on this forum assume that this is impossible is the coping mechanism I refer to. And most fail at finances because they never really think it through. They were born and raised to make excuses rather than to try to overcome. They fundamentally lack the resilience and emotional maturity to progress.
Now there's no excuse to carry debt unless you absolutely have to
And it's not like you can make a profit in buying a house now and renting it out. Rental payments are way cheaper than mortgage payments
07-16-2023, 09:26 PM
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#42
Originally Posted By Crazy_Desi⏩
The odds of having some catastrophic event is very very low but good insurance will always pay out. I've had clients at work with very expensive cars get smashed and insurance always pays properlyinsurance will find any reason to not pay out. there are always clauses in there that fuk over the policy holder. not a dumb question.
look at car insurance, medical insurance, life insurance, etc.. all try to find reasons to not pay out.
look at car insurance, medical insurance, life insurance, etc.. all try to find reasons to not pay out.
07-16-2023, 09:29 PM
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#43
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Originally Posted By ATB161⏩
Sigh.The leveraging game is finished. Leveraging was great when you could get a 2.5% mortgage for 30 years, not at 7%. It makes zero sense
Now there's no excuse to carry debt unless you absolutely have to
And it's not like you can make a profit in buying a house now and renting it out. Rental payments are way cheaper than mortgage payments
Now there's no excuse to carry debt unless you absolutely have to
And it's not like you can make a profit in buying a house now and renting it out. Rental payments are way cheaper than mortgage payments
Originally Posted By LogicalLifts⏩
Edit: It's carsalesman, I feel like negging myself for not noticing it, lol. Carry on.Because the discussion on this board is rarely scientific enough. It's much better over at Bogleheads.
Here large, sweeping comments are made about entire countries without a care for the basic principle in property investments: location, location, location.
It's how you can separate the LARPers from the actual property investors, btw. Rather easily.
Here large, sweeping comments are made about entire countries without a care for the basic principle in property investments: location, location, location.
It's how you can separate the LARPers from the actual property investors, btw. Rather easily.
07-16-2023, 09:37 PM
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#44
Originally Posted By sam212⏩
It will probably depend on location a lot. You can research the areas and see the house prices. If the graph looks like this, you are better off waiting a bit, if not, go for it. Gambling that you can make a fraction more in bonds or ETFs is riskier than owning a house outright.Budget is between 700k-1.2mil. Looking at couple of areas. Probably around 3000 sqft
.
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07-16-2023, 10:03 PM
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#45
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If you're an MD pulling $400k+ why would you settle for a $700-1.2M home? You could afford more. That's the type of home a dual income household would buy that makes $300k or so.
07-16-2023, 10:06 PM
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#46
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Originally Posted By Crazy_Desi⏩
You're supposed love below your means.If you're an MD pulling $400k+ why would you settle for a $700-1.2M home? You could afford more. That's the type of home a dual income household would buy that makes $300k or so.
When it comes your time to die, be not like those whose hearts are filled with the fear of death, so that when their time comes they weep and pray for a little more time to live their lives over again in a different way. Sing your death song and die like a hero going home.
07-16-2023, 10:10 PM
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#47
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Originally Posted By Crazy_Desi⏩
Also, where you looking OP? South Barrington?If you're an MD pulling $400k+ why would you settle for a $700-1.2M home? You could afford more. That's the type of home a dual income household would buy that makes $300k or so.
07-16-2023, 10:14 PM
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#48
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Originally Posted By Crazy_Desi⏩
Making more than 400k, just not looking to buy something too extravagant. Something nice and practical. Both me and the wife come from humble background, so we’re happy with that. We’d like to live in a nice walkable community with great schools. Rather not say where I live to remain anonymous.If you're an MD pulling $400k+ why would you settle for a $700-1.2M home? You could afford more. That's the type of home a dual income household would buy that makes $300k or so.
07-16-2023, 10:19 PM
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#49
Originally Posted By Crazy_Desi⏩
Why do you need something more than that? I have a buddy with a 5000 sqr foot house and he uses maybe half of itIf you're an MD pulling $400k+ why would you settle for a $700-1.2M home? You could afford more. That's the type of home a dual income household would buy that makes $300k or so.
Anything more than 3000 square feet is typically overkill and half used
07-16-2023, 10:20 PM
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#50
Originally Posted By LogicalLifts⏩
Nothing I said is incorrectSigh.
Edit: It's carsalesman, I feel like negging myself for not noticing it, lol. Carry on.
Edit: It's carsalesman, I feel like negging myself for not noticing it, lol. Carry on.
"Leveraging" now when rates are astronomical is complete stupidity
07-16-2023, 10:21 PM
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#51
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Yes but wait until the 60% price crash
07-16-2023, 10:23 PM
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#52
Originally Posted By Schnitzl⏩
Sigh. Another person who has no clueIt will probably depend on location a lot. You can research the areas and see the house prices. If the graph looks like this, you are better off waiting a bit, if not, go for it. Gambling that you can make a fraction more in bonds or ETFs is riskier than owning a house outright.
How would bonds pay more than the 6.5%? Keep in mind bonds growth gets taxed where savings on mortgage interest is untaxed. You would need 10+% for it to make sense
07-16-2023, 10:28 PM
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#53
07-16-2023, 10:29 PM
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#54
[QUOTE=r32gojirra post_id=1686647203]Yes but wait until the 60% price crash
[imttps://imagecdn.bodybuilding.com/gallery-photo/29855246/e91d03dfe76d4e79b51124a971f3bbe7-610xh.jpg[/img]
]https://imagecdn.bodybuilding.com/gallery-photo/29855246/e9751384850345f3a011d3ce5fb286a0-610xh.jpg[/img][/QUOTE]
A lot of people saw what happened in 2007 and assumed it's inevitable it will happen again
In reality the current market factors are driven so to where another crash is extremely unlikely. How are people gonna default on a house when they know the Rent payment will be triple otherwise if they are evicted? Most people either bought or refied in 2020 so you have a bunch of people with 1200 payments in an era when rent payment would be 2500 a month...
These people will hold on to these mortgages like their life depended on it and will let a car get repoed before anything else
[imttps://imagecdn.bodybuilding.com/gallery-photo/29855246/e91d03dfe76d4e79b51124a971f3bbe7-610xh.jpg[/img]
]https://imagecdn.bodybuilding.com/gallery-photo/29855246/e9751384850345f3a011d3ce5fb286a0-610xh.jpg[/img][/QUOTE]
A lot of people saw what happened in 2007 and assumed it's inevitable it will happen again
In reality the current market factors are driven so to where another crash is extremely unlikely. How are people gonna default on a house when they know the Rent payment will be triple otherwise if they are evicted? Most people either bought or refied in 2020 so you have a bunch of people with 1200 payments in an era when rent payment would be 2500 a month...
These people will hold on to these mortgages like their life depended on it and will let a car get repoed before anything else
07-16-2023, 10:32 PM
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#55
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I would buy the house in cash. No mortgage, no monthly payments. It would make for a lovely life.
With that said, at the present moment I would wait a year or so simply because the housing market is exhibiting bubble behavior. At the very least I would get a six-month apartment lease with the intention of buying right at the end of that.
With that said, at the present moment I would wait a year or so simply because the housing market is exhibiting bubble behavior. At the very least I would get a six-month apartment lease with the intention of buying right at the end of that.
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Glow, glow, glow your boat
07-16-2023, 10:33 PM
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#56
Originally Posted By LurkoLantern⏩
Anybody who claims they can read or predict the house market is full of chitI would buy the house in cash. No mortgage, no monthly payments. It would make for a lovely life.
With that said, at the present moment I would wait a year or so simply because the housing market is exhibiting bubble behavior. At the very least I would get a six-month apartment lease with the intention of buying right at the end of that.
With that said, at the present moment I would wait a year or so simply because the housing market is exhibiting bubble behavior. At the very least I would get a six-month apartment lease with the intention of buying right at the end of that.
Wasting another 16K on an apartment for 6 months is nonsense. Buy a house as soon as you can
07-16-2023, 10:34 PM
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#57
Originally Posted By EnochsProphecy⏩
0 valueSure he could afford more, but does he need more? What value will having more add? He could just live extremely comfortable and invest the rest.
Anything bigger than 3000 sqr feet is not even close to being fully used, unless maybe u have 5 kids and 3 dogs
07-16-2023, 10:50 PM
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#58
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Dude you’re 40 without a home wtf
Losers let it happen, winners make it happen.
Nonsense Army Crew.
07-16-2023, 10:53 PM
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#59
07-16-2023, 11:00 PM
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#60
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Buying a house cash may give you a sense of personal security because you won't have a debt that you owe, you'll just be responsible for your property taxes and HOA if applicable
Buying a house with leverage means you can have the rest of that cash available for investing which *should* net you more in the long run. Especially when you consider you can write off mortgage interest on your taxes
It's up to you and if you need that sense of personal security or not OP
Buying a house with leverage means you can have the rest of that cash available for investing which *should* net you more in the long run. Especially when you consider you can write off mortgage interest on your taxes
It's up to you and if you need that sense of personal security or not OP
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