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Alternatively, you could save the $200k down payment, invest it, and invest any difference in lower monthly expenses to end up with a pretty nice nest egg after
by scarmig 11y ago
Alternatively, you could save the $200k down payment, invest it, and invest any difference in lower monthly expenses to end up with a pretty nice nest egg after 30 years, and live off the capital gains.
- stank345 11y agoYou mean a $20k down payment, right? Most of us aren't buying million dollar homes...
- tootie 11y agoNot just the downpayment. If your monthlies are lower you're earning interest on those savings as well.
- guelo 11y agoMost of us aren't buying $100k homes either. National median home price is $219k. In the Sillicon Valley area it's $900k.
- stank345 11y agoYeah, I just figured it was a typo. It begs the question though: what percentage of us are putting 20% down?
- calbear81 11y ago$20k would mean a $100k house which is hard to buy in most mid-size and larger cities unless you're willing to live a bit more remotely.
- scarmig 11y ago200k is downright ordinary in the Bay Area, unfortunately. But, yeah, some places have lower typical down payments, but rents tend to also decline commensurately with home prices. Roughly speaking.
- vidarh 11y agoConsider the purchase a hedge against faster house price growth. For the last 7 years, I've paid 1.09% interest on my mortgage (I'm in the UK; Bank of England rates are at 0.5%), while house prices have kept increasing . Which means that with repayment, I'm paying half as much as I would if I was renting. The rest is free for me to invest... It very much depends on where you live, and how the markets develop what pays off. But I'm very happy I bought. If you buy your house as an investment, it's a big risk. If you buy it as a hedge, and intend to stay long term, it's generally pretty cheap insurance against getting priced out of the area you want to live in.
- scarmig 11y agoThe answer is always very much it depends, of course! And I'm in the process of purchasing a house myself, so I clearly don't think it's an insane decision. It is, however, more complicated than the train of thought that says, "After 30 years, you'll own your own place, instead of having thrown away hundreds of thousands of dollars to a landlord."