Pondering the upgrade: Apt, condo, or house

[kissmybASS01]

I guess this is mostly aimed at fellow Canucks as I don't know the specifics in the US, but Americans can chime in with "non-regional" specifics

Currently I'm living in an apartment paying about $850-ish for rent, utilities, and grocs. Just for a reference, that's about low-middle (mid-bass) average for a 1 br apt. Condos are around $120K+ and houses can be had for about the same.
I realize that if I upgrade to either a house or condo, I will be paying a lot more

Several questions:

-Is it better (subjective, I know) to pay rent "for life," pay condo fees every year, or pay into a mortgage every year.

-Are condo fees and mortgage payments about the same?

- Can equity be built up in a condo as well as a home?

I realize that some "pros" to a house include being able to renovate at will, complete privacy, ???
"Cons" include yardwork, being on the hook for any/all major repairs, if the neighbourhood "goes south" you're stuck, ???

I hope that this makes sense. For those in the know, YES, I AM COMPLETELY A NEWBIE regarding the whole housing issue.

[iamlowsound]

Condos and houses both build equity. You have to pay both your mortgage and condo fees with a condo, but all the work is taken care of for you. I would say that it is better to own something, rather than rent something. So either the condo or the house would be better. Really is depends on your life style. If you have free time every week when you can do the required chores and you don't travel a lot, a house is great. If you are always busy and traveling, a condo would probably be better. All IMO.

lowsound

[Nashvillefunk]

As a mortgage consultant, I'm always going to advise you get either a house or condo, so long as you can afford the payments comfortably and plan to stay somewhere for the next at least 5-7 and hopefully more. With a standard 30 year mortgage you wont start building up any equity until at least that time, even in a decent appreciating market. For ex. on a 120K loan at 6.5% over 30 years, you would only pay down $7,666.83 in the first five years. When you consider realty fees and such when trying to sell you just about break even. From years 5-10 you'll have paid off 10,500, and years 10-15 you'll have paid $14,661 so as you can see the longer you stay in the property the better financial investment you've made. Other tips and tricks involve paying your mortgage bi-weekly ( every two weeks instead of once a month) which cuts the full amortization from 30 years to around 23 or just something as simple as paying an extra $100/month which can knock over 8 years off the loan. If you're the type of person that needs to be somewhere new every 3 years, renting is cheaper, if you can stick to an aggressive pay schedule and stay put a mortgage will payoff better.

Hope some of that helps.

-Nash

[kissmybASS01]

Thanks guys for the helpful advice!! As of Rite now, I'm not seriously looking (yet) but just planning 4 the future ya kno? I'm also going to look into pre-approvd mortgages from the "suits" Please xcuse the typing shortcuts, but surfing frm my PSP on holidays in BC

[iamlowsound]

Originally Posted by Nashvillefunk

As a mortgage consultant, I'm always going to advise you get either a house or condo, so long as you can afford the payments comfortably and plan to stay somewhere for the next at least 5-7 and hopefully more. With a standard 30 year mortgage you wont start building up any equity until at least that time, even in a decent appreciating market. For ex. on a 120K loan at 6.5% over 30 years, you would only pay down $7,666.83 in the first five years. When you consider realty fees and such when trying to sell you just about break even. From years 5-10 you'll have paid off 10,500, and years 10-15 you'll have paid $14,661 so as you can see the longer you stay in the property the better financial investment you've made. Other tips and tricks involve paying your mortgage bi-weekly ( every two weeks instead of once a month) which cuts the full amortization from 30 years to around 23 or just something as simple as paying an extra $100/month which can knock over 8 years off the loan. If you're the type of person that needs to be somewhere new every 3 years, renting is cheaper, if you can stick to an aggressive pay schedule and stay put a mortgage will payoff better.

Hope some of that helps.

-Nash

Paying weekly is even better, but some places wont let you do that. My dad said that he knocked 11 years off his mortgage doing that. Also, whenever you get a raise, don't start living higher, put all that extra money toward your mortgage payments.

lowsound

[kissmybASS01]

Originally Posted by iamlowsound

Paying weekly is even better, but some places wont let you do that. My dad said that he knocked 11 years off his mortgage doing that. Also, whenever you get a raise, don't start living higher, put all that extra money toward your mortgage payments.

lowsound

ooh...hard one! Raise = new gear or Raise = btmless pit paymnts! Btw, how many ppl can actually afford wkly paymnts on anything

[Scarlet Fire]

Originally Posted by kissmybASS01

ooh...hard one! Raise = new gear or Raise = btmless pit paymnts! Btw, how many ppl can actually afford wkly paymnts on anything

If you live within your means and stay disciplined with your spending habits, it's not that difficult. Unfortunately, the majority of the U.S. has no idea what "living within your means" implies.

[Nashvillefunk]

Originally Posted by Scarlet Fire

Unfortunately, the majority of the U.S. has no idea what "living within your means" implies.

You have no idea how true that statement really is, I'm amazed on a daily basis.

[machine gewehr]

A poll w/o carrots?

[kissmybASS01]

To live within one's means is definately beyond US borders. With credit cards so easy to come by, my cat could probably get approved!

Budgeting is not one of my strongest suits. Right now, I would need at least a $200 more a month to warrant a serious look at a new bass rig..oops, I mean a house. That or win the lotto jackpot