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I'm buying a house, because downpayment + misc. costs are going to result in less monthly cost (mortgage + HOA + taxes) than the rent I pay now. The difference
by euyyn 11y ago
I'm buying a house, because downpayment + misc. costs are going to result in less monthly cost (mortgage + HOA + taxes) than the rent I pay now. The difference is bigger than what I'd obtain by just investing that money somewhere safe.
A year ago, with about the same salary but less savings, I wouldn't have been able to meet the 20% downpayment mark, so loan insurance would have make it not profitable. Before that, with even less savings to put as downpayment, just the monthly mortgage payment would have been higher than my rent.
I disagree with your premise that the poor can often get loans big enough to make an impact in their lives. And when they do, they tend to be predatory loans.
- SilasX 11y agoThe story is trying to illustrate a specific dynamic: because of being unable to spend a little more in one month [1], you end up having to pay a lot more in later months. You're supporting that by illustrating a situation where being able to come up with a lot of money over a year enables a savings later, which gives a different impression than "look how poor you become from not having $50 one time". I think your example supports my point: being poor has costs, but it doesn't look at all like the dynamic given. >I disagree with your premise that the poor can often get loans big enough to make an impact in their lives. And when they do, they tend to be predatory loans. But if the savings is so sharp, then even a predatory loan could reverse the cycle. In practice, it doesn't. So the theory is incomplete. [1] though inflation since the writing makes the amount larger than it sounds now