How do people afford homes in city centers?

[~bs]

that's amazing. around here that much money wouldn't even get you a 50 year old 1 bedroom condo.

[JoeP]

Even the "cheaper" homes can come with strings attached: taxes. A friend bought a house for I believe $450k and is bracing for property and school taxes coming to $17k/year. So even if their house was paid off now, they would face over $1400k/mo (plus utilities and insurance).

[msomnipotent]

Even the "cheaper" homes can come with strings attached: taxes. A friend bought a house for I believe $450k and is bracing for property and school taxes coming to $17k/year. So even if their house was paid off now, they would face over $1400k/mo (plus utilities and insurance).

My home is valued at $470,000 and the property taxes are $12,000, and we live in a high tax area. It it wasn't for our exemptions, we would be paying over $18,000. Your friend may have bought a heavily discounted house and the taxes haven't been adjusted, or they have not applied any exemptions. He might want to dispute them.

[disneysteve]

My home is valued at $470,000 and the property taxes are $12,000

We're in NJ, home of the worst property taxes in the country.
Our home is worth about $250,000 and our taxes are $8,000. It is the main reason why very few people remain in NJ after they retire. They all move to other places like Delaware or Florida or the Carolinas or wherever. Just anywhere but NJ because of the taxes.

[JoeP]

My home is valued at $470,000 and the property taxes are $12,000, and we live in a high tax area. It it wasn't for our exemptions, we would be paying over $18,000. Your friend may have bought a heavily discounted house and the taxes haven't been adjusted, or they have not applied any exemptions. He might want to dispute them.

No, he paid full price, and learned that the home values in the area are increasing due to a re-assessment. It is a town known for high taxes.

[Gailete]

Even the "cheaper" homes can come with strings attached: taxes. A friend bought a house for I believe $450k and is bracing for property and school taxes coming to $17k/year. So even if their house was paid off now, they would face over $1400k/mo (plus utilities and insurance).

This is so true! we owe only about $63K on our mortgage, but we pay the property taxes ourselves as well as the insurance. Those two alone run around $7K/year. Our house got assessed at around $250K after having been only around $50K for years, but one day the tax folks noticed that hubby was building a house there! Even when we get the house paid off, we will be paying the equilivant of the house payment on taxes and insurance. It is not fun. Especially since the land was given to him and the house itself probably only ran $100-120K to build as many recycled items went into it. BTW we are on 3 acres of land.

Many of the recycled parts came from the old school that was torn down. We have marble countertops that were recycled walls from the school, Wood paneled walls in the living room that are recycled closet doors, I could go on for a long time. When I first called to get insurance on the place and told the lady on the other end of the phone the things we had, it was interesting. They don't care HOW you got marble kitchen counter tops, they have to insure you to be able to replace countertops with marble again! And wood paneled walls. and the list goes on. We had to insure for $500K I finally was able to get them to come down some after a few years.

But how people can afford to buy and maintain these high-priced houses is beyond me. Although when these folks have to sell, and the realtor has an open house, you sometimes can see what is behind closed doors. One place was like a furniture store advertisement with everything matchy-matchy. Upstairs was a different story. In the bathroom linen closet were towels that were so raggedy I would have demoted them to rags and bought new towels, furniture that looked like it had been picked up at yard sales or the end of day giveaways. Where the people really lived it was like poverty-ville and downstairs was just to impress. They probably were renting the furniture downstairs. Turned out the house was owned by one of the big guys at my job, a CFO or something along that line! He had just lost his job along with a lot of other layoffs at work.

[TexasHusker]

Property taxes and insurance are a huge part of home ownership.

Listening to Dave Ramsey, "No house payment" is seemingly the holy grail. He says "No one can take your house."

Wanna bet? You don't pay those taxes and they'll take it.

On my house, the taxes and insurance comprise about 40 percent of the total payment. So if I paid off my house today, and I think the payoff is around $252K, I would only be saving around $1200 per month, with only maybe $750 of that amount being interest.

I'm sorry, but I'm not busting out $252K to get rid of a $750 per month interest payment. Not now, not ever. If that $750 really changes my world, I've got big problems.

I can instead invest that $252K in something that produces a great income, to make that house payment plus a whole lot more!

[GoodSteward]

Property taxes and insurance are a huge part of home ownership.

Listening to Dave Ramsey, "No house payment" is seemingly the holy grail. He says "No one can take your house."

Wanna bet? You don't pay those taxes and they'll take it.

This is the very reason I smh at "debt-free living" by most peoples standards. You will never be debt free with the tax system, and there will always be a house payment. It will decrease a lot when the mortgage is gone, but there will always be a "payment" if you want to keep it, called taxes.

On those same lines, you'll also always have other "life taxes." Medical, auto, education, etc. You will never hit a point where you don't have to either be saving or paying something back off. It's just life, and it's far from debt free. We just change the definitions to make us feel better. Just because we have the cash to pay upfront instead of having payments doesn't mean it still didn't cost us money either way. Just less when no interest is involved, and it was handled with less stress usually.

Don't get me wrong, little to no consumer debt or major debts is great(and necessary for building wealth for most people). However, you have to accept that you will always need to either pay on something, or save up for it to pay cash (still a payment, but on your terms on how you pay or "save.") It's all semantics. Just like how we love to say we "save" money when we spend less. It's a mental trick to think you are increasing your financial well being, when, in fact, you are losing some in the form of a material thing.

Lol...us silly peoples and our languages.

[disneysteve]

This is the very reason I smh at "debt-free living" by most peoples standards. You will never be debt free with the tax system

We've had this debate before but I don't consider a routine monthly (or quarterly or annual) bill to be a debt.

A debt is when I've borrowed money and have to repay it.
I didn't borrow any money from the state so my tax bill isn't a debt any more than my cable bill is a debt. Yes it's money I have to pay but so is my phone bill and my car registration and my newspaper subscription. None of those are debts either.

[TexasHusker]

We've had this debate before but I don't consider a routine monthly (or quarterly or annual) bill to be a debt.

A debt is when I've borrowed money and have to repay it.
I didn't borrow any money from the state so my tax bill isn't a debt any more than my cable bill is a debt. Yes it's money I have to pay but so is my phone bill and my car registration and my newspaper subscription. None of those are debts either.

semantics really.

My granddad used to say this about cars: "You're either saving for one or paying for one."

[GoodSteward]

We've had this debate before but I don't consider a routine monthly (or quarterly or annual) bill to be a debt.

A debt is when I've borrowed money and have to repay it.
I didn't borrow any money from the state so my tax bill isn't a debt any more than my cable bill is a debt. Yes it's money I have to pay but so is my phone bill and my car registration and my newspaper subscription. None of those are debts either.

I understand. It's all how you view it. Payments are not always debts. I just see some of these things as debts, regardless of if you borrow to gain it. No matter how long or how much you pay in property taxes, they can take your house/land if you don't keep paying them the amount they deem appropriate.

To get back on point. The property taxes some of you have to pay is mind-boggling to me. I pay around $1k a year lol.

[TexasHusker]

I understand. It's all how you view it. Payments are not always debts. I just see some of these things as debts, regardless of if you borrow to gain it. No matter how long or how much you pay in property taxes, they can take your house/land if you don't keep paying them the amount they deem appropriate.

To get back on point. The property taxes some of you have to pay is mind-boggling to me. I pay around $1k a year lol.

My property taxes are $650 per month. Then again, there is no state income tax here, nor personal property or annual vehicle tax. But the state is going to get their $$$, one way or another.

[GoodSteward]

My property taxes are $650 per month. Then again, there is no state income tax here, nor personal property or annual vehicle tax. But the state is going to get their $$$, one way or another.

I only pay $50 more a month for my house, insurance, and taxes. And that is on a 15 yr mortgage @ 3.75%.

Apparently, I'm grandfathered into some old way of figuring house insurance, too. Under the new system, I'd be around $1,100 a year. Currently, for the same coverage, I'm paying $550/yr.

[TexasHusker]

I only pay $50 more a month for my house, insurance, and taxes. And that is on a 15 yr mortgage @ 3.75%.

Apparently, I'm grandfathered into some old way of figuring house insurance, too. Under the new system, I'd be around $1,100 a year. Currently, for the same coverage, I'm paying $550/yr.

My home owners insurance runs about $3200 per year. Ouch.

[LivingAlmostLarge]

I noticed that on it varies so much. Our old townhouse was 2x the property taxes of what we pay but 50% the value of our current home. So it really matters where you live. We were paying $1k/month property taxes and now we're about $650/month but realize the house is 2x the price so how i can complain?