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Lets not forget extra expenses that you can't opt out of. You can technically opt out of cell phone and internet, but for me I wouldn't be able to be on call f

by derekp7 11y ago

Lets not forget extra expenses that you can't opt out of. You can technically opt out of cell phone and internet, but for me I wouldn't be able to be on call for work so no job. Not to mention how much modern society has shifted to assume everyone has these luxuries. Then there is various forms of insurance. It used to be, if car insurance was too high people could opt out, now your only choice is to opt out of driving (not possible except in some cities). Oh, and that 30 year mortgage you took out? Requires house insurance. Which was $300 a year (on a $180K house) just a few years ago -- now it is over $1600 on the same house (with a market value of $130K). But I can't cancel it, because mortgage requires it. Now the place you work at (which was a 5 minute drive) decided to consolidate to corporate headquarters 30 miles away. Let's not even mention what happens if you need surgery (even with good insurance).

ericd 11y ago
Did you put down less than 20% as a down payment? I was under the impression that PMI was only required if one put less than that down?
- hospes 11y ago
  I think he is referring to homeowners insurance. Unlike driving a car, you can legally own a home without homeowners insurance. However, if you finance your home with a mortgage, your lender most likely will require you to have home insurance coverage to protect your home in case of damage caused by unforeseen circumstances (fires or natural disasters). Last time I checked homeowners insurance prices were something between 0.5-1% of the home value annually. It sounds ridiculous but it does not cover flood, you need separate insurance for that. Edit: Lender will require this insurance until home is 100% paid off.
  - ericd 11y ago
    That doesn't sound that ridiculous - that's an expected value of total loss every 100 or 200 years. If you live on a known a flood plain, I also don't think there should be any expectation of less than a very high premium, unless your house is built on stilts. What we probably need is tools that make the total cost of ownership more transparent, though.
  - derekp7 11y ago
    Yes, this is regular homeowner's insurance -- it went from 300 a year to 1650 a year within the span of about 5 years. This was just after the 2008 economic meltdown, so I'm sure the insurance companies had to make up for other investment losses. But their excuse, is that my 180K house (with a market value of 160K) has a rebuild cost of over 350K based on their estimation.

by derekp7 11y ago

ericd 11y ago

Did you put down less than 20% as a down payment? I was under the impression that PMI was only required if one put less than that down?

hospes 11y ago
I think he is referring to homeowners insurance. Unlike driving a car, you can legally own a home without homeowners insurance. However, if you finance your home with a mortgage, your lender most likely will require you to have home insurance coverage to protect your home in case of damage caused by unforeseen circumstances (fires or natural disasters). Last time I checked homeowners insurance prices were something between 0.5-1% of the home value annually. It sounds ridiculous but it does not cover flood, you need separate insurance for that. Edit: Lender will require this insurance until home is 100% paid off.
- ericd 11y ago
  That doesn't sound that ridiculous - that's an expected value of total loss every 100 or 200 years. If you live on a known a flood plain, I also don't think there should be any expectation of less than a very high premium, unless your house is built on stilts. What we probably need is tools that make the total cost of ownership more transparent, though.
- derekp7 11y ago
  Yes, this is regular homeowner's insurance -- it went from 300 a year to 1650 a year within the span of about 5 years. This was just after the 2008 economic meltdown, so I'm sure the insurance companies had to make up for other investment losses. But their excuse, is that my 180K house (with a market value of 160K) has a rebuild cost of over 350K based on their estimation.