I did one of those calculators and saw how much interest there is.

Couldn't believe how many people are voluntarily financially cucked like that.

Buys houses outright in cash crew checking in.

I see people take out mortgage son houses that are way beyond their means. "Look at ma house!" "oh lawd 35 years I'll pay it off and if anything in life goes wrong I won't be able to pay it off". Live with your parents--if they are normal parents and not nightmares--for as long as you can while saving for a solid down payment and not wasting money - but still spend enough to have some enjoyment. And people wonder why humans get angry when they divorce and lose half their assets. BRB my whole life to pay off something, here take half.

lol, basic TVM (time value of money) skills not even once.

250k mortgage at 3% for 30 years means you pay a total of ~129,000 in interest.

EDIT: Learn how to use this,

http://www.zenwealth.com/businessfin...alculator.html

that's how most loans work op.....

you pay the most interest during the beginning of the loan life

Well it is a scam because that money they lent you they have just created out of thin air when you took out the mortgage, they then charge interest on it

Out of thin air? Really?

He's actually not making that up. It's not completely out of thin air, but banks "create" money by making loans. The money doesn't exist until the loan is created.

Fractional-reserve banking

Because bank deposits are usually considered money in their own right, and because banks hold reserves that are less than their deposit liabilities, fractional-reserve banking permits the money supply to grow beyond the amount of the underlying reserves of base money originally created by the central bank.

I'm painfully aware of how the system works.

It's not a scam, it's just MATH.

If you loaned me money, how would you expect to be compensated?

You do know compound interest also applies to savings?

If it is such a bad deal, my not rent until you save up enough money to buy cash? Oh wait...

30 year note at 3%? More like $400,000ish in payments - if you actually keep/stay the home for 30 years


Some of you are complete morons ITT and it started with OP

This is true. Bassicaly all banks loan much more money then they have in reserve and they cover with non saving accounts too. If things go bad they have federal support or just declare bankruptcy. Good any way.

How is it a scam? You know up front (if you bother to do the math) what you are getting into.

If you don't like it, rent from me, pay the mortgage on my income property for me, and save up the money you need to buy a house with cash.

Lmao it's unbelievable how stupid people can be with money

You can easily return >5% a year by investing in the stock market.

So if someone is willing to loan you money at 3% interest, that's a bad deal? Plus you can take the deduction on your tax return.

Lmao at paying cash for a home unless it's NYC or some other ultra competitive real estate market

LOL at the retards in here
"what, you think they should loan it for free?"

No you dumb bastards, he's saying it's a joke that with a 3% interest rate, you are paying more than 10 times that interest at the start. You'd think 3% of your 250k mortgage would mean you would end up paying 75k in interest, not another 150k..

Hey bro, you got a 30 year mortgage?

well if inflation is 3% per year, in 30 years $1 will be worth 42 cents.

so the bank needs to make money off you today, because in 30 years if your payments are fixed, you will be ripping them off.

The problem op is the 3% represents the cost to borrow over only 1 year. So its just a logical equation from there, nothing to dispute really. If you borrow 1000 at 3% you owe 1003 first year. Pay it off by then and theres no issues and you would pay less interest in most cases as payments before the last day would cause the principle amount the interest is applied to go down.
The problem is you apply interest to the remainder each year so the interest overall becomes squared, cubed and so forth.

Ps rent is essentially 100% interest.

The whole housing market is a scam. Everything from the realtors to the bankers. Basically it all comes down to how easy it has become to get a mortgage and snowballs from there. Banks (cough chough govt...same thing) drive down interest rates, create more funding options for people, and the best one of them all was variable rate mortgages. The masses of sheep will buy what the banks say they can afford and the banks can manipulate the numbers to make it look like your pet dog can afford a house. This drives up housing prices to astronomical values and when this happens, everyone in the housing market wins including realtors, brokers, mortgage insurance, banks, insurance companies, developers, builders, etc. The ones that lose is everyone else just trying to get a piece of that American dream. We are tricked into thinking these houses are an investment because they're increasing in value every year. This is true but guess what? So are all the houses around you. And the rate at which they are increasing is controlled by the banks lending powers. It's a very fragile market completely controlled by greed.

Cliffs - 99% of the population can not afford a house but 65% have one.

Yeah, we're the retards. At least we understand amortization. And math.

buy your house in cash op

but who was inflation, who was diminishing value of money?
you agree to 30 years at a fixed rate/fixed amount. the 500,000 you pay is worth only about 375,000 in present money; if you live anywhere in the western world, your 250k investment will easilly be worth 1,000,000 in 30 years, or 500,000 in present money.


property taxes on the other hand......

grandmother bought my house for $5000, its worth 350-400k now, no mortgage


really really fukking lucky, mortgages looked horrifying when i was checking the rates out

3% of $250k would be $7.5k, not $75k.

I guess you could get a loan like that if you were able and willing to take out a 1 year loan and interest compounded annually instead of daily.

not sure if escaped from mental hospital.
interest is driven by supply and demand; good luck to the banks lending out mortgages at 7% these days.
also, have you tried buying a house lately? going through it now, and i've easily filled out over 200 pages worth of documents (the bank went through EVERYTHING)

Be careful throwing around the "retard" label, when you write down crap like that. Retard.

OP is 31 and just now figured out how interest works

Supply and demand? Good one.



I bought 3 houses in the last decade. The last one was a little over a year ago. It really wasn't any more difficult than previous times. The hardest part is handing out 5% to realtors, and all the other BS that comes with closing costs.