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Author Topic: Mortage Payments  (Read 876 times)

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Änσnymσus

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Mortage Payments
« on: January 02, 2015, 09:19:54 PM »
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    • Hi,

    I am trying to figure out if I should buy a house instead of renting. The only reason I would like to buy a house is to reduce my monthly rent payments which are starting to be unaffordable as our family is growing. There are 7 people in our household.

    So how much is your mortgage payment? does it make sense to buy JUST so I can pay less each month?

    Thanks!
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    Offline ggreg

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    Mortage Payments
    « Reply #1 on: January 02, 2015, 11:03:44 PM »
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    • Without more information it is impossible to work out or advise.

    Suffice it to say that being a landlord is profitable, more often than not, but not highly profitable.  Net margin is around 5 percent if all goes well.  Demand and supply can also reduce rents.  I wouldn't be a landlord for a living.

    I bought a house because I was settled and knew I wouldn't move either around the country or the world for work.  The biggest advantage is that I could design the layout to suit the way we live.  That is what I missed most about renting that you cannot knock walls down.

    Also, consider that when you own a house you need to maintain it.  Tomorrow, I have to rehang some gates to our driveway.  Every other weekend I have a major job to do.  I am forever maintaining or replacing something or other.

    When renting the landlord should take care of that stuff leaving you more free time.  If you put that free time into work, overtime, or a small business you might very well be better off renting.

    The correct decision can be personal as well as financial.  Some men hate picking up a toolbox.  Others are glad to get away from the wife or the noise of the children for a couple of hours.
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    Online Nadir

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    Mortage Payments
    « Reply #2 on: January 03, 2015, 01:12:59 AM »
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    • Owning your own home has a sense of permanence and security where you can act as you wish - nails in the walls, or even knock a wall out, rearrange the garden; on the other hand you have to ensure that place is really where you want to be. How are the neighbours, traffic etc?

    I would feel very insecure in rented premises. If you rent you can be asked to move on, if the owner wants you out.

    I presume you wish to buy your own home to live in it, and not have a home as an investment. In the case of the latter, tenants don't usually take care of a house as well as an owner and rents don't always cover the repayments, not to mention agent fees, insurance and repairs.  

    That's just off the top of my head. You really need to tell us more.
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    Änσnymσus

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    Mortage Payments
    « Reply #3 on: January 03, 2015, 01:57:03 AM »
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    • Don't forget to factor in maintenance and repair costs, taxes, water, garbage, electricity.  It's a lot easier to pay for a new roof, furnace, new flooring, etc  if you've been putting the money aside from when you move in.

    I agree with ggreg, if you may have to up and move in 5 years for a new job it may not be worth the investment if you are only looking at the financial side of it.  But owning a home gives one a sense of "belonging" so for someone who is settled in an area and can afford it I highly recommend it.  And if you are handy, a fixer-upper just might make it affordable.

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    Änσnymσus

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    Mortage Payments
    « Reply #4 on: January 09, 2015, 02:24:50 PM »
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    • I have mixed feelings about home ownership.

    On the one hand, we have our own place and we can do what we want.  We don't really have to answer to a landlord about how many kids we have or what kind of dog we have.  (Some places don't allow pets at all.)  Also, we don't have to worry about the landlord selling our home out from under us.

    But....

    Home ownership is also like an anchor.  Once you own it, you are pretty much stuck there.  If the market goes sour, you may get stuck with a home you can't sell for what you owe on it.  Also if the neighborhood goes bad after 10 years, you might not be able to sell and move either.  It can also be difficult if you change jobs and  have to move to a new city.  What happens if your house is on the market for a year before  you can sell?

    There are a lot of factors to consider, really.

    Can you really afford a house?  How much of a house can you afford?  What are the housing costs in your city?  What are property taxes like?  After you mortgage, will you have money for maintenance?  (The maintenance is always more than you realize.)

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