My long ass Rant...and there is a question in there to

[gamecock43]

analysis paralysis. YES! That is what I have! I dont like this aspect of my personality and have not exhibited signs of it before, but I cought it from someone, somewhere and I have it bad.
I keep telling myself to be patient, it will all come together when it is meant to be. If I force the issue then I will make a bad decision.
In the meantime I will keep up with the boards. I think I have alot in common with scrimpandsave and I will see how her situation progresses.

[Cylenchar]

As someone who works in the Mortgage market (for a home builder no less), I think your friends advice is much too simplified to be useful at all.... Home prices are dropping, but they had been at RECORD highs... something that may interest you is find a hous for sale in a neighborhood you like, and look at the county appraisers page, it tracks the value the home has sold for, it's impressive to see some of the jumps.

[Snave]

I'll throw my two cents in. I am in the middle of a house being an investment. Here is my reasoning. If you pay rent for 30 years at $1000 month, then you are out $360,000. If you get a $200,000 loan at 6% on a $250,000 house, then you will pay $431,000 total or (231,000 in interest). At the end of the 30 years, you will have a paid for home which probably has gone up in value. If you continue to rent, the only thing that will probably go up is the price of rent. That means, you will be out much more than $360,000. So, in that regard, a home is an asset. Now, there are other expenses along the way such as insurance, upkeep, etc... so that needs to be factored in. That is how you end up on the liabilty side of things.

[cicy33]

I'll throw my two cents in. I am in the middle of a house being an investment. Here is my reasoning. If you pay rent for 30 years at $1000 month, then you are out $360,000. If you get a $200,000 loan at 6% on a $250,000 house, then you will pay $431,000 total or (231,000 in interest). At the end of the 30 years, you will have a paid for home which probably has gone up in value. If you continue to rent, the only thing that will probably go up is the price of rent. That means, you will be out much more than $360,000. So, in that regard, a home is an asset. Now, there are other expenses along the way such as insurance, upkeep, etc... so that needs to be factored in. That is how you end up on the liabilty side of things.

Okay, please help me to understand this one. You are basically saying above that the person buying the house is paying double the cost? Isn't that a lot more interest than 6%? Or is it because it is over such a long time to pay it back? Which in that case if you paid it back quicker it would be less, right? I personally agree that right now is a good time to buy houses if you are careful and look for the deals. My reasoning is simple, everyone is selling to avoid losing and selling lower than they should. If you (not meaning you specifically) were to buy say a few houses then rent them out you could make a really nice profit in a few years. I really wish we had the money to buy about 5 houses right now.

[gamecock43]

Yes, if you pay interest over 30 yrs you end up paying about double the original price of the house. Snave up above explains it nicely; If you get a $200,000 loan at 6% on a $250,000 house, then you will pay $431,000 total or (231,000 in interest) At the end of the 30 years. On top of that, you will be paying taxes, insurance and maintance.
Now to add to that example, lets say over the 30yrs you spend $5,000a yr in insurance, taxes, maintance. Thats an additional $150,000? (am I calculating that right? holy cow!) that has been paid over the 30 yrs and also needs to be recouped when selling the house. Your $200,000 house needs to sell for $581,000 to break even. (is that calculated correctly? I'm still very new to this business) But regardless- its these numbers that scare me. Do I have almost $600,000 to spend on a house over the course of my lifetime? maybe. Have I found a single listing yet that costs $200k but looks worth over half a million? not yet.
Disclaimer- before people jump down my back on how I am still going to be spending a large amount in rent over those 30yrs if I choose not to buy- I know that. Thats why I'm still considering buying.

[LivingAlmostLarge]

Houses are liabilities. But there are intangible factors that cannot be denied.

LIKE being evicted because the landlord needs the apartment for his relative moving in! That's happened to me! Hey your lease is up get OUT! Or living with roommates who don't pay and their checks bounce and you have to cover it! So F----- UP! Then you end up paying more because the check bounces.

Or you can't have a dog because no one will rent to you. Or you have complaints about the noise.

Yeah buying is expensive but sometimes you buy peace of mind.

[feh]

Yes, if you pay interest over 30 yrs you end up paying about double the original price of the house. Snave up above explains it nicely; If you get a $200,000 loan at 6% on a $250,000 house, then you will pay $431,000 total or (231,000 in interest) At the end of the 30 years. On top of that, you will be paying taxes, insurance and maintance.
Now to add to that example, lets say over the 30yrs you spend $5,000a yr in insurance, taxes, maintance. Thats an additional $150,000? (am I calculating that right? holy cow!) that has been paid over the 30 yrs and also needs to be recouped when selling the house. Your $200,000 house needs to sell for $581,000 to break even. (is that calculated correctly? I'm still very new to this business) But regardless- its these numbers that scare me. Do I have almost $600,000 to spend on a house over the course of my lifetime? maybe. Have I found a single listing yet that costs $200k but looks worth over half a million? not yet.
Disclaimer- before people jump down my back on how I am still going to be spending a large amount in rent over those 30yrs if I choose not to buy- I know that. Thats why I'm still considering buying.

A couple comments:

1) These numbers assume a 30 year loan. I don't recommend that long of a term. 15 or 20 years at most.

2) You need to take inflation into consideration. In 15 years, rent will likely be twice as expensive (in today's dollars) as it is now. Fifteen years from now your mortgage payment will not have changed.

3) Tax savings from property tax and interest deductions.

4) The value of your home will increase.

Don't let the big numbers frighten you. I find it very hard to believe that renting is more cost effective than owning in the long run.

[gamecock43]

I cant do a 15 or 20 yr loan. Put me up on the "dumbest justifications for wasting money" thread. I dont care. I am struggling to come to terms figuring out how to make monthly payments on a 30yr loan, and to keep those payments about the same on even a 20yr loan, I have to look in an undesirable area for a not so desirable home.
Does this mean I should wait 5 yrs to be able to afford a 200k mortgage on a 15 or 20 yr loan?

[Seeker]

I cant do a 15 or 20 yr loan. Put me up on the "dumbest justifications for wasting money" thread. I dont care. I am struggling to come to terms figuring out how to make monthly payments on a 30yr loan, and to keep those payments about the same on even a 20yr loan, I have to look in an undesirable area for a not so desirable home.
Does this mean I should wait 5 yrs to be able to afford a 200k mortgage on a 15 or 20 yr loan?

No, Gamecock -- it means you don't do it.

If you have any qualms about staying in the area that you are in, you probably should not buy.

Earlier you wrote that you might go elsewhere and decide you really want to be there instead. If that's the case; then hear me: You. Should. Not. Buy.

Buying in your case will be a liability.

You need to be 100% confident in your ability of employment to meet expenses, not only currently, but also in the future. If you are thinking of moving in 3 years or less, then do not buy a house / condo / townhouse. It's not worth it for the short term.

Owning a home is a long-term committment. Whether or not it loses value or gains value is essentially not material because it's your home -- it's under your terms; no one else dictates whether or not that garbage disposal unit gets repaired etc. If you live in one place for 10+ years, chances are that you have gained value. But yes, there's always a price. There are pros and cons to everything.

Nothing worthwhile is free. Everything has price. And nobody knows the future.

You need to trust yourself and be comfortable with your decisions for you regardless of what anyone else think or says. And if you begin the process without knowing or being comfortable with it, then you shouldn't do it.

[Snave]

Yes, if you pay interest over 30 yrs you end up paying about double the original price of the house. Snave up above explains it nicely; If you get a $200,000 loan at 6% on a $250,000 house, then you will pay $431,000 total or (231,000 in interest) At the end of the 30 years. On top of that, you will be paying taxes, insurance and maintance.
Now to add to that example, lets say over the 30yrs you spend $5,000a yr in insurance, taxes, maintance. Thats an additional $150,000? (am I calculating that right? holy cow!) that has been paid over the 30 yrs and also needs to be recouped when selling the house. Your $200,000 house needs to sell for $581,000 to break even. (is that calculated correctly? I'm still very new to this business) But regardless- its these numbers that scare me. Do I have almost $600,000 to spend on a house over the course of my lifetime? maybe. Have I found a single listing yet that costs $200k but looks worth over half a million? not yet.
Disclaimer- before people jump down my back on how I am still going to be spending a large amount in rent over those 30yrs if I choose not to buy- I know that. Thats why I'm still considering buying.

In this instance, it was a $250,000 home and a $200,000 mortgage. At the end of 30 years, if you average 2.5% increase in your homes value, you will re-coop nearly all of your money. Now, you could say that you won't get a 2.5% increase over 30 years - true, but your home will most likely go up in value over a 30 year period. The economy and housing crisis can't be that bad for that long.