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Forum » mortgages are the biggest scam (compounded interest)
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Thread: mortgages are the biggest scam (compounded interest)

post 1459241533 08-25-2016, 09:16 AM
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i can deduct my interest payments on my mortgage from my taxes.
post 1459241633 08-25-2016, 09:16 AM
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Originally Posted By Retoaded⏩
Its amortization, not compound interest, that kills you.
This. If you see the mortgage all the way through then 3% is fine. People generally sell before they pay it off. You get wrecked on a 30 year because it's amortized heavy with interest at the beginning. Then consumers upgrade only to pay heavy interest on a 30 year again!!!
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post 1459242083 08-25-2016, 09:19 AM
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Solution: rent. Then, out of your $10,000 rent payments, $0 of it is interest (and also $0 of it is equity to your name). Problem solved?
post 1459242093 08-25-2016, 09:19 AM
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Just rent then. Say you start renting at age 18 and live until you're 80 paying $1,000 in rent, you'd end up paying roughly $750,000. Nah bro. I'll take my $1,000/month mortgage payment and then own the house in 30 after paying back $200,000 in interest. It's far cheaper.
post 1459243553 08-25-2016, 09:30 AM
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Originally Posted By SaltyDog920⏩
Just rent then. Say you start renting at age 18 and live until you're 80 paying $1,000 in rent, you'd end up paying roughly $750,000. Nah bro. I'll take my $1,000/month mortgage payment and then own the house in 30 after paying back $200,000 in interest. It's far cheaper.


Not really. It's pretty close. The advantages you get are freedom to move when and where you want and a lot less risk. The disadvantage is slightly less net worth. But it's not as big of a gap as most of you think.
post 1459244093 08-25-2016, 09:34 AM
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what are you talking about compound interest, there is no compound interest on a mortgage bro, do you even Finance?
post 1459244433 08-25-2016, 09:36 AM
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Originally Posted By vsportsguy⏩


Not really. It's pretty close. The advantages you get are freedom to move when and where you want and a lot less risk. The disadvantage is slightly less net worth. But it's not as big of a gap as most of you think.
I rented until last year at 30 years old I got my first house. Used to always tell people fuk buying, I like freedom etc like the video you posted and the mind set you have. However, after owning I'd say owning is the way to go 100%. You actually have freedom with ownership, renting you are tied to a landlord. Also, the mortgage assumptions they make in the comparisons are usually whack...my mortgage plus all house expenses is like $2,500 a month....buuuuuut I have two girls living with me paying total $1,600 a month, so I pay only $900, and I'm the landlord so I get control over the house, and I can choose to sell the house at anytime, I'm not stuck here
post 1459245773 08-25-2016, 09:43 AM
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Originally Posted By trufflepigg⏩
I rented until last year at 30 years old I got my first house. Used to always tell people fuk buying, I like freedom etc like the video you posted and the mind set you have. However, after owning I'd say owning is the way to go 100%. You actually have freedom with ownership, renting you are tied to a landlord. Also, the mortgage assumptions they make in the comparisons are usually whack...my mortgage plus all house expenses is like $2,500 a month....buuuuuut I have two girls living with me paying total $1,600 a month, so I pay only $900, and I'm the landlord so I get control over the house, and I can choose to sell the house at anytime, I'm not stuck here
If your argument is owning is cheaper or you have more control over your property than renting that's fine. But you will never have more freedom with owning. Not only do I get the option to leave my rental agreement for free once a year, but I can leave my rental agreement at any other time with about a month of lost rent. Good luck doing that as quickly or cheaply a homeowner.
post 1459245793 08-25-2016, 09:43 AM
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Originally Posted By trufflepigg⏩
I rented until last year at 30 years old I got my first house. Used to always tell people fuk buying, I like freedom etc like the video you posted and the mind set you have. However, after owning I'd say owning is the way to go 100%. You actually have freedom with ownership, renting you are tied to a landlord. Also, the mortgage assumptions they make in the comparisons are usually whack...my mortgage plus all house expenses is like $2,500 a month....buuuuuut I have two girls living with me paying total $1,600 a month, so I pay only $900, and I'm the landlord so I get control over the house, and I can choose to sell the house at anytime, I'm not stuck here
or, rent with a roomate and pay $600/mn.

I can have a roomate and live for less than $1200/mn.

right now I have no rent so my world is a bit different but I'm an outlier.

No desire to own a home right now but to pay cash for a 800 sq foot cabin in the middle of nowhere would be pretty cool I guess.
post 1459246513 08-25-2016, 09:49 AM
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Originally Posted byPatheticPeter

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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)
200 pages? Damn. I bought my house in January and it was easy. It was just a matter of signing a bunch of crap (not even close to 200 pages of stuff tho) and waiting for appraisal/inspection/etc chit to come back. I literally did nothing but wait on everyone else and make unreasonable demands to the seller before I would close. I told them to fix everything on the inspection and pay closing costs and they did, it was awesome, literally $10k+ in work + 10k in closing but they fibbed on a few things. Said the septic was recently pumped (it wasnt, I just had to get it pumped it was nearly full).

Everyone says buying a house is hard and confusing but my realtor/lawyer explained everything in detail that I had questions about. All the work is done in the background by the realtor/seller/bank and I just responded to them when they needed me to sign a document or made requests from the seller. It's just a waiting game
Originally Posted By EnforcerOTF⏩
i can deduct my interest payments on my mortgage from my taxes.
This and the taxes you pay on the property value.
post 1459250373 08-25-2016, 10:14 AM
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The older I get, the more I realize modern banking is a big fukking ponzi scheme. I'm all for free market systems but the world would be a much better place without debt based economies.
#
post 1459250913 08-25-2016, 10:18 AM
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Originally Posted By gixxer0.6g⏩
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.
He's sorta right.

The supply of money is very, very high right now, and overall demand can't meet supply. Therefore interest rates are low.

It's the end result of QE: Lenders get a giant pile of cash, rather than money ending up as M0, which leads to high inflation.
post 1459251093 08-25-2016, 10:19 AM
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Originally Posted By gregtkeg⏩
Solution: rent. Then, out of your $10,000 rent payments, $0 of it is interest (and also $0 of it is equity to your name). Problem solved?
Hopefully youre trolling....
Originally Posted By gixxer0.6g⏩
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.
This is what gets me. Im a painfully easy client to deal with and don't have realtors driving me around days at a time. Yet they get that much on the transaction. But then again, im buying, so im not paying.
Originally Posted By PatheticPeter⏩
interest is driven by supply and demand; good luck to the banks lending out mortgages at 7% these days.
Weird. I thought the base of where interest rates was the federal reserve rates....
Originally Posted By GreenWave1⏩
Yeah, we're the retards. At least we understand amortization. And math.
Lol. Was thinking this. Read that post and he obviously doesn't get how interest rates work.
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post 1459251113 08-25-2016, 10:19 AM
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The hope is that you make money in the end when you sell your place....

My in laws bought a house 30 years ago for $150,000 now houses in their neighbourhood are going for $1.2 to $2 Million.
Otherwise just rent.
post 1459251523 08-25-2016, 10:21 AM
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Just earn more money OP. Last year I had a spare 10k so paid off a chunk of mortgage. If you do that regularly you won't pay that much interest.
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post 1459251653 08-25-2016, 10:22 AM
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Originally Posted By HarryFlashman⏩
Just earn more money OP. Last year I had a spare 10k so paid off a chunk of mortgage. If you do that regularly you won't pay that much interest.
Better off investing that 10k than sinking it in your mortgage in all reality.
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post 1459252243 08-25-2016, 10:26 AM
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Originally Posted By EnforcerOTF⏩
i can deduct my interest payments on my mortgage from my taxes.
I want to warn people about the mortgage interest deduction, as realtors love to talk it up. It only applies if you can itemize your deductions, which means you have to beat out the standard deduction.

If you don't live in an expensive city (your mortgage is small), and you have a low interest rate (and you will, because rates are in the toilet right now), you might not be paying enough in interest to actually make itemizing worthwhile. Also, more than likely, you don't have other deductions you can take unless you're a business owner.

I was able to take the deduction last year since interest is higher at the start of the loan, but it's likely the last year I will ever be able to take the mortgage interest deduction.
post 1459253023 08-25-2016, 10:31 AM
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post 1459253423 08-25-2016, 10:34 AM
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OP is correct, interest on mortgages is retarded, you're basically paying at min 50% more, and that's at historic low interest rates!??!?

I feel bad for the older brahs who lived through 18%+ but then again, a house was half the cost or cheaper.

The only reason I would get a mortgage is for a cash generating rental property.
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post 1459253583 08-25-2016, 10:35 AM
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Originally Posted By Dan_S⏩
I want to warn people about the mortgage interest deduction, as realtors love to talk it up. It only applies if you can itemize your deductions, which means you have to beat out the standard deduction.

If you don't live in an expensive city (your mortgage is small), and you have a low interest rate (and you will, because rates are in the toilet right now), you might not be paying enough in interest to actually make itemizing worthwhile. Also, more than likely, you don't have other deductions you can take unless you're a business owner.

I was able to take the deduction last year since interest is higher at the start of the loan, but it's likely the last year I will ever be able to take the mortgage interest deduction.
I got my mortgage about 7 years ago and it's at 6.9% so I pay a ton of interest. It's kind of a double edged sword, but I'd rather spend it on interest than give it to the IRS.
post 1459253773 08-25-2016, 10:37 AM
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Originally Posted By EnforcerOTF⏩
I got my mortgage about 7 years ago and it's at 6.9% so I pay a ton of interest. It's kind of a double edged sword, but I'd rather spend it on interest than give it to the IRS.
WATTTT!? That's fukin retarded. My buddy just re-upped his and it was 2.49
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post 1459253923 08-25-2016, 10:37 AM
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Originally Posted By bbsitum⏩
Right this. Those people that work in banks can not work for free either. It exist non interest loan for muslims. I know a huge investor from downtown Minneapolis of Egiptian heritage that buy buildings with Saudi Arabia (terrorist) money interest free.
I crack up every time I see you post. You're like the poster boy of tradies.
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post 1459254053 08-25-2016, 10:38 AM
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Originally Posted By EnforcerOTF⏩
i can deduct my interest payments on my mortgage from my taxes.
Originally Posted By Dan_S⏩
I want to warn people about the mortgage interest deduction, as realtors love to talk it up. It only applies if you can itemize your deductions, which means you have to beat out the standard deduction.

If you don't live in an expensive city (your mortgage is small), and you have a low interest rate (and you will, because rates are in the toilet right now), you might not be paying enough in interest to actually make itemizing worthwhile. Also, more than likely, you don't have other deductions you can take unless you're a business owner.

I was able to take the deduction last year since interest is higher at the start of the loan, but it's likely the last year I will ever be able to take the mortgage interest deduction.
All that stuff is phased out once you get over like 100k income or something.

Obviously, you can make interest only payments, but at 3% it's almost free money anyways, better off just investing it. I never really understood the compulsion to pay down low interest loans.
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post 1459254443 08-25-2016, 10:41 AM
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Housing always baffles me. Why the **** should i pay half of my paycheck towards a house that i spend 12+ hours a day away from and the rest of it sleeping so i can be gone for those 12+ hours again the next day?
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post 1459254943 08-25-2016, 10:44 AM
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Originally Posted By gixxer0.6g⏩
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.
One thing people forget about too is all the interest they paid on their house between the time they bought it and sold it when calculating their profit.
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post 1459255033 08-25-2016, 10:45 AM
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Originally Posted By EnforcerOTF⏩
I got my mortgage about 7 years ago and it's at 6.9% so I pay a ton of interest. It's kind of a double edged sword, but I'd rather spend it on interest than give it to the IRS.
refinance?
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post 1459255063 08-25-2016, 10:45 AM
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only on the misc would people defend mortgages and the inflated cost of homes
post 1459255243 08-25-2016, 10:46 AM
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Originally Posted By JoshSP1985⏩
refinance?
I am going to, but wasn't sure if I was gonna sell my house or not. Plus my finances weren't great up until 3 or 4 years ago
post 1459255273 08-25-2016, 10:46 AM
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How much % wise is a down payment on a house usually?
post 1459255443 08-25-2016, 10:47 AM
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Originally Posted By bodymovesyou⏩
The hope is that you make money in the end when you sell your place....

My in laws bought a house 30 years ago for $150,000 now houses in their neighbourhood are going for $1.2 to $2 Million.
Otherwise just rent.
Crazy how different prices move in different areas things are petty stagnant in the midwest. My old house was built in 87 sold for like 160k I bought it 5 years ago at 170k put about 15k into it and sold it for 200k so without my improvements it probably would have sold for like 175k so the same house only went up about 15k in 30 years midwest market for ya it's in an in demand location in and in demand neighborhood too.
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