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Imagine borrowing money to buy anything, including a house. Yikes!

inglor_cz 6y ago
Let us hope that the new "work from home" standard resulting from Covid will usher in an age of "deconcentration" from major cities. I could buy an older house in Czech countryside with my savings. A garage in Prague would cost approximately the same. In America, the price differential between rural and metropolitan areas is even worse. Movement back to the countryside could deflate the bubble and make property accessible without mortgages again.
- sushshshsh 6y ago
  Completely and totally agree. The price of a new construction house in Redmond WA is around $1,400,000 USD and involves lots of paperwork and rules to be able to qualify to buy. The price of a similarly specified house in Iowa or West Virginia in a very affluent zip code is less than $600,000, some closer to $400,000. It is conceivable that a married couple with 10 years of savings could buy this house cash and continue working remote as they please!
aphextron 6y ago
> Imagine borrowing money to buy anything, including a house. Yikes! Is this a joke? The 30 year mortgage is possibly the single most powerful financial tool available to an average person. It allows you to leverage hundreds of thousands of dollars for just a few percent down. Imagine going to your stock brokerage and asking for 1000% margin on a $10,000 account. You would be laughed at. Yet that's precisely what a mortgage allows you to do. In the US at least, home ownership is also incredibly tax advantaged as well, to the point that it is almost impossible to build wealth otherwise for a normal working class person.
- ghaff 6y ago
  It's less tax-advantaged in the US under current tax law than it used to be depending upon housing prices where you live and whether you itemize deductions. But, in general, I certainly agree. The idea that there's something inherently wrong with getting a mortgage is silly. (Obviously, some people do buy more house than they can afford.)
  - sushshshsh 6y ago
    How do you feel about those who are excluded from home ownership due to not qualifying for a mortgage because of arbitrary rules and supply constrictive zoning laws?
  - votepaunchy 6y ago
    The TCJA changes to personal deductions expire at the end of 2025, so the tax benefits of a mortgage will return.
- sushshshsh 6y ago
  Please explain to me why it's beneficial to society to people to work 30 years, paying all sort of interest and fees to middle men and excluding the median citizen from home ownership? Dare I remind you that a single income family could afford a new construction home with just 4 years of salary in the 1950s and 1960s. Build more houses, make everyone that can go remote, remove the needless fake money bidding wars that come from easy leverage for those who qualify. It is scientifically proven that when a human owns something instead of rents it, they take much better care of their property and their community (source: google). Mortgages and renting just bring despair and trigger apocalyptic emotions in humans, which is why the Bronx looks like the Bronx, and Bellevue looks like Bellevue.
  - scrose 6y ago
    > Mortgages and renting just bring despair and trigger apocalyptic emotions in humans, which is why the Bronx looks like the Bronx, and Bellevue looks like Bellevue. I’m assuming you’re referring specifically to the South Bronx with your comment. An area that is in the state it’s in primarily because of decades of racist redlining that prevented any sort of leveraged investment in properties and services.
IAmGraydon 6y ago
Imagine being foolish enough to spend a wad of cash that could earn 8% per year to avoid borrowing the money at 3.5% per year (or actually less now).

Let us hope that the new "work from home" standard resulting from Covid will usher in an age of "deconcentration" from major cities. I could buy an older house in Czech countryside with my savings. A garage in Prague would cost approximately the same. In America, the price differential between rural and metropolitan areas is even worse. Movement back to the countryside could deflate the bubble and make property accessible without mortgages again.

sushshshsh 6y ago
Completely and totally agree. The price of a new construction house in Redmond WA is around $1,400,000 USD and involves lots of paperwork and rules to be able to qualify to buy. The price of a similarly specified house in Iowa or West Virginia in a very affluent zip code is less than $600,000, some closer to $400,000. It is conceivable that a married couple with 10 years of savings could buy this house cash and continue working remote as they please!

aphextron 6y ago

> Imagine borrowing money to buy anything, including a house. Yikes! Is this a joke? The 30 year mortgage is possibly the single most powerful financial tool available to an average person. It allows you to leverage hundreds of thousands of dollars for just a few percent down. Imagine going to your stock brokerage and asking for 1000% margin on a $10,000 account. You would be laughed at. Yet that's precisely what a mortgage allows you to do. In the US at least, home ownership is also incredibly tax advantaged as well, to the point that it is almost impossible to build wealth otherwise for a normal working class person.

ghaff 6y ago
It's less tax-advantaged in the US under current tax law than it used to be depending upon housing prices where you live and whether you itemize deductions. But, in general, I certainly agree. The idea that there's something inherently wrong with getting a mortgage is silly. (Obviously, some people do buy more house than they can afford.)
- sushshshsh 6y ago
  How do you feel about those who are excluded from home ownership due to not qualifying for a mortgage because of arbitrary rules and supply constrictive zoning laws?
- votepaunchy 6y ago
  The TCJA changes to personal deductions expire at the end of 2025, so the tax benefits of a mortgage will return.
sushshshsh 6y ago
Please explain to me why it's beneficial to society to people to work 30 years, paying all sort of interest and fees to middle men and excluding the median citizen from home ownership? Dare I remind you that a single income family could afford a new construction home with just 4 years of salary in the 1950s and 1960s. Build more houses, make everyone that can go remote, remove the needless fake money bidding wars that come from easy leverage for those who qualify. It is scientifically proven that when a human owns something instead of rents it, they take much better care of their property and their community (source: google). Mortgages and renting just bring despair and trigger apocalyptic emotions in humans, which is why the Bronx looks like the Bronx, and Bellevue looks like Bellevue.
- scrose 6y ago
  > Mortgages and renting just bring despair and trigger apocalyptic emotions in humans, which is why the Bronx looks like the Bronx, and Bellevue looks like Bellevue. I’m assuming you’re referring specifically to the South Bronx with your comment. An area that is in the state it’s in primarily because of decades of racist redlining that prevented any sort of leveraged investment in properties and services.

IAmGraydon 6y ago

Imagine being foolish enough to spend a wad of cash that could earn 8% per year to avoid borrowing the money at 3.5% per year (or actually less now).