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Two years ago I had to replace my roof and the cost was more than the sum of mortgage payments for a year. Not too long before that, the AC needed replacement

Two years ago I had to replace my roof and the cost was more than the sum of mortgage payments for a year. Not too long before that, the AC needed replacement and that was ~ 6 months of mortgage payments. I’m grateful that I can afford it, but I understand that the mortgage isn’t the entire cost of the house and that renting allows me to leverage someone else’s capital in an efficient manner.

xhkkffbf 4y ago
It's worth remembering that mortgage payments rarely include utilities, but some rental leases do. Also, getting out of a rental is often as easy as just leaving. Some unscrupulous types forget to pay the last few months of rent before skipping out giving themselves an unofficial discount. When owners want to sell, they need to pay commissions, inspection costs, transfer taxes, title searches and a few more unexpected and hidden charges. The transaction can take months and that's when you find a buyer. Yes, many people like to focus on the extreme profits that some lucky people have found in the right neighborhoods, but housing prices do go down and they often go down by a staggering amount. When you're underwater on your mortgage, you're trapped. You might be able to afford the monthly payments but you can't sell because you don't have the spare cash to pay off the mortgage. The high down payments evolved as a safety mechanism for the banks first, but also for the home buyers because markets fluctuate.
- kcplate 4y ago
  >When you're underwater on your mortgage, you're trapped. You might be able to afford the monthly payments but you can't sell because you don't have the spare cash to pay off the mortgage. You can short sell if the lender is willing. Caveat being they will gift you the difference which can count as income and is taxed. There was an Obama era program during the last housing bubble burst that provided tax relief as well as incentives to the lenders to allow the short sale. Not sure if it’s still active, but it helped a lot of folks avoid foreclosures.

xhkkffbf 4y ago

It's worth remembering that mortgage payments rarely include utilities, but some rental leases do. Also, getting out of a rental is often as easy as just leaving. Some unscrupulous types forget to pay the last few months of rent before skipping out giving themselves an unofficial discount. When owners want to sell, they need to pay commissions, inspection costs, transfer taxes, title searches and a few more unexpected and hidden charges. The transaction can take months and that's when you find a buyer. Yes, many people like to focus on the extreme profits that some lucky people have found in the right neighborhoods, but housing prices do go down and they often go down by a staggering amount. When you're underwater on your mortgage, you're trapped. You might be able to afford the monthly payments but you can't sell because you don't have the spare cash to pay off the mortgage. The high down payments evolved as a safety mechanism for the banks first, but also for the home buyers because markets fluctuate.

kcplate 4y ago
>When you're underwater on your mortgage, you're trapped. You might be able to afford the monthly payments but you can't sell because you don't have the spare cash to pay off the mortgage. You can short sell if the lender is willing. Caveat being they will gift you the difference which can count as income and is taxed. There was an Obama era program during the last housing bubble burst that provided tax relief as well as incentives to the lenders to allow the short sale. Not sure if it’s still active, but it helped a lot of folks avoid foreclosures.