A conundrum
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An ancient conundrum; you think anyone’s mortgage payment is £500, in any country? Ha!
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I've never paid a mortgage, but £500 seems pretty low. Do mortgage payments tend to be that much cheaper than rent prices?
Definitely not as low as £500… but mortgages are generally cheaper, sometimes much cheaper than rent. Example: we own a 5-bedroom house with a mortgage of $1,900, my step-son just moved into a 2-bedroom apartment for $2,200 rent.
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Front or back yards?
First one, then the other.
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An ancient conundrum; you think anyone’s mortgage payment is £500, in any country? Ha!
My actual mortgage payment is probably just under $500. Taxes and insurance just put it at about $1000. I bought a nearly crack den quality fixer upper about 6 years ago in a moderately low COL area. In the truely low COL areas I imagine you might still be able to manage the same pricing today. It's probably doable, just not anywhere most people want to live or with a house that doesn't have a bunch of issues.
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First one, then the other.
That'll take forever but I'm prepared to play the lawn game.
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That seems to be for the US when OP is in the UK based on the £ use
true, whoops lol. sorry
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Suppose I was the bank...
Guy1) Hey bank I want to sell my house for $1,000,000.00. Here is the deed, I owe $999,999.00 bank2.Bank1) OK I'll take the house, here is $1.00 and $999,999.00 for bank2. Did you fuck up the house or burn it down to the point I can't sell it?
Guy1) yup to the ground I burnt it all.
Assessor) I'll charge Bank 1 $300 to go asses the price. Yeah currently this property can be sold for $300,546.00.
Bank 1) OK Guy1, you owe Bank2 $699,454.00 but here's your $1.00.
Guy1) your honor I need to file for chapter 11. I have no money
Guy2) Bank 1, I would like to buy this property.
Bank1) Sure that'll be $1,000,000.00.
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Hey, I just did these things! Water heater i was ripped off, which cost me $2600, and the roof i actually thought was a good deal at 17k. Not fun but the roof made me happy. The water heater actually destroyed my basement by leaking out...
And so now you've learned that you need to regularly flush the water heater and change out the anode rod every few years, right? I just bought my first house. Hot water wasn't working right. Heating element was dead. Why? There was so much scale that the lower element was covered in it. Replaced the element, flushed as much out as I could reasonably remove, and then flushed again six months later while replacing the anode rod. This keeps the corrosion at bay.
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An ancient conundrum; you think anyone’s mortgage payment is £500, in any country? Ha!
"in any country" took it too far, since there's places where you can basically buy a house outright for that amount. "Western/first world" wouldn't even cover it I don't think, with Italy and eastern Europe being a thing. Even in my very expensive western European country our mortgage isn't that much higher than that (we kinda lucked out), but of course once you account for all real expenses it is.
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I'm glad someone mentioned the 2008 financial crisis. Banks need to be fairly confident the person they are giving the mortgage to can afford the payment now and for the next thirty years. There are plenty of unfair reasons why someone may not be able to buy a home today, but not being able to afford a down payment is not one of them.
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Then there’s all the expenses you didn’t know about before you bought the house.
The cost of owning is significantly less than renting over the life of the unit. Repairs happen, but most of the time they aren't time critical, so you can budget out the repairs over months.
Unless the house was old when you bought it, you aren't going out of pocket on any big purchases inside the first years of ownership.
…BTW, the county just did a reassessment on your property and your property taxes have now doubled
Idk where you live, but most states limit the rate at which an acessor can raise your housing price. In Texas, the cap is 10%. So your property taxes can rise, but the won't double overnight.
You can also contest the increase. Harris has been fairly receptive to a simple "my neighbor's house sold for X so my house should be worth about X, not X+20%"
The cost of owning vs renting can be very different depending on where you live and work and the amenities you want access to. Renting somewhere centrally located with good access to high quality transit and other amenities would likely be cheaper than owning. Unless we can start normalizing owning apartments again. You could own for cheaper on the outskirts of downtown, but you'll likely be sacraficing access to some amenities by doing so.
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They don't actually need regular payments for 10-30 years. They need you deposit that down payment cash ASAP so they can lease it to billionaires and crypto exchanges.
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Then there's all the expenses you didn't know about before you bought the house. If you don't have at least some DIY skills, you get to pay people a lot of money to fix things for you.
...BTW, the county just did a reassessment on your property and your property taxes have now doubled. In exchange, you get nothing. Congratulations.
wrote last edited by [email protected]I always find this to be such a poor argument.
Yes unexpected maintenance can sometimes be a huge problem, especially in the first couple of years, but after that you can tap into home equity and repair say a roof. Everything else while expensive is still cheaper than renting. Using the OP's example 1k vs 500, I can assure you you will never have consistent 500 repairs per month.
As for the taxes the people in my city nearly went ballistic when the city increased the rate by 5%. At the end of the year it costed me $200. Per month that's about $16. I've never lived in any apartment anywhere where rent didn't increase by at least $50 per month each year. Even if someone had a home twice as valuable that's still a very small monthly cost.
Additional once you get past the first 3ish years rent prices have greatly outpaced your mortgage and you will be saving a lot of money compared to of you were renting.
I'd like to wrap up with a question. If owning a home was such a sink of resources why do people become landlords?
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Whats going on is decades of mismanagement of property taxes and city zoning. People fight tooth and nail to keep their property taxes low, and eventually the city has to do a big increase because they failed to increase incrementally. The bigger issue is how poorly we zone and design most north american cities.
The average car dependant suburb costs more to maintain than it generates in tax revenue. A denser area like mixed use neighbourhoods and "missing middle" housing fares far better and generates enough that it often ends up subsidizing the rest of the city, the same is usually true for denser downtowns. That trend is dying off as those denser areas demolish tax revenue generating businesses and homes to pave parking lots that don't generate taxes to park cars from the suburbs that don't generate enough taxes.
You can't afford a home because for decades suburbs were given a massive tax break while denser downtowns (guess where the poors have to rent and ultimately fund the property taxes) have to subsidize car dependant expensive to maintain subdivisions (which is usually for middle class or wealthier people, especially when built new). Add in some racial demographics and we've basically engineered every city to have secret tax cuts for anyone rich enough to get into the suburbs.
The best part is, many cities are keeping the cycle going because the only way they are paying for maintaince of an old subdivision is by using the devleopment taxes and fees from a new subdivision. This is not sustainable and ultimately equates to kicking the can down the road to let a future generation figure it out (which is literally as simple as building cities densely again, as they had been built for 100s of years).
This hasn't even touched yet on the urban sprawl, energy ineffeciency, and secondary effects of car dependancy that have all spawned from "the american dream" of suburbia. We seriously need to reconsider how we zone, build, and get around our urban spaces.
I agree with a lot of what you said but this is complete bullshit:
while denser downtowns (guess where the poors have to rent and ultimately fund the property taxes)
I have never been able to live in a "downtown" because I'm just a construction worker. So GTFO with "these poor inner city areas are funding the suburbs." I'm in one of the nicer houses I've ever managed to live in and it's primarily a shithole. You're telling me that the people downtown are subsidizing my white-trash ass? No way.
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And so now you've learned that you need to regularly flush the water heater and change out the anode rod every few years, right? I just bought my first house. Hot water wasn't working right. Heating element was dead. Why? There was so much scale that the lower element was covered in it. Replaced the element, flushed as much out as I could reasonably remove, and then flushed again six months later while replacing the anode rod. This keeps the corrosion at bay.
With new water heaters yes, do your maintenance. Old water heater that came with the place and hasn't been touched in years? Yeah, the advice is to actually not flush it because you don't know what cracks that gunk might be blocking up and it will be more likely to fail on you sooner.
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I wouldn't say you get nothing from paying property taxes.
Depends where you live. Where I live we just get more funded cops to more expensively harass houseless people.
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Hey, I just did these things! Water heater i was ripped off, which cost me $2600, and the roof i actually thought was a good deal at 17k. Not fun but the roof made me happy. The water heater actually destroyed my basement by leaking out...
I'm guilty of ignoring my water heaters. Had my backup start to leak and it cost $1500 to replace. So I immediately bought a new anode rod for my primary tank. Drained/flushed it and replaced the old rod which was completely gone. It was an easy task but you will need a cheap impact wrench, 1 1/16" socket and chain link anode rod to make it easy.
It's something you need to do every couple of years. But I never do it.
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I tell my soon-to-leave-the-nest kids:
Rent is the most you will pay every month. The mortgage is the least you will pay every month.
I'm loving them being here as full grown adults and enjoy my time with them and with our particular house they are seeing that lesson play out in real time. Some big expenses and I am the DIY dude. I don't fuck with (big) electric or gas though, that shit can really backfire.
The other side of that is that my mortgage, even with rising property taxes and my house appreciating wildly in value, tracks less than renting.
If I could rent a place for the price of my mortgage with the cost rising at the level my mortgage does … I’d rent all day long
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good news, theyre counting rent and utilities payment as a way to build credit now! link
wrote last edited by [email protected]That's just for the "paid on time" section of your report. It helps a bit with your score, but it doesn't change how banks determine your debt to income ratio.
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I agree with a lot of what you said but this is complete bullshit:
while denser downtowns (guess where the poors have to rent and ultimately fund the property taxes)
I have never been able to live in a "downtown" because I'm just a construction worker. So GTFO with "these poor inner city areas are funding the suburbs." I'm in one of the nicer houses I've ever managed to live in and it's primarily a shithole. You're telling me that the people downtown are subsidizing my white-trash ass? No way.
You’re both right which is what’s so fucked.
