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Buying a home..

Discussion in 'Off Topic [BG]' started by jazzy grille, Jul 16, 2008.


  1. jazzy grille

    jazzy grille - Arrogant Bastard

    Aug 15, 2006
    Sarasota, Florida
    Anyone else looking into getting a home here in the US while the market is down..

    My finances are in line and I think that it might be a good idea seeing that the value of houses are getting cheaper. My brother just got a house built for around 600K and it would have been worth about 7 figures 4 years ago. He actually ended paying less for the house than expected because the value dropped before it was done. Mind you that this is a house for me to live in, not to make a profit... (Okay maybe later on... Down the road)
     
  2. Robert B

    Robert B Somewhere under the rainbow Supporting Member

    Jan 21, 2000
    Rittman, OH, USA
    Seems to me this would be a great time to buy for first time buyers. But for those of us who already own, it would be difficult to sell our current home to buy another. I'm not worried though, this will pass. And if I were you I'd go for it!
     
  3. My wife and I thought about the same thing. We live in a very modest house, and could turn it fairly easily because many people are downsizing because they lived outside their means.

    I think it is a great time to buy. :hyper:

    The problem is that the wife wants a big pool at the new place. :rollno:
     
  4. Dangle

    Dangle

    May 28, 2008
    My wife and I have been looking at houses for a couple months, but the companies we work for are prone to layoffs, so we have to survive the next round to feel even a bit safe about getting into that much debt.
     
  5. Rich L

    Rich L

    May 17, 2006
    Ft Myers, FL
    Really depends on what part of the country you're in. I'm a land developer in the Tampa Bay area and can safely say Florida is still at least a year or two from hitting bottom. Not a good time to buy right now, especially in Florida, Arizona or Cali.

    Wife & I got lucky and sold at the top of the market and have been renting ever since, and have no plans on buying anytime soon.
     
  6. I just got married, so my wife and I will be looking for a house to move into once the lease on our apartment ends in November.
     
  7. Marlat

    Marlat

    Sep 17, 2002
    London UK
    From another thread:

    This is really something to think about. At least in the UK, most loans in the first years you are only paying a tiny amount of principal, most of the repayment is interest. That means say you are paying $3000 per month off your home loan, you are probably paying $2900 in interest and $100 in principle. As a rule of thumb it is almost always cheaper to rent than it is to buy teh equivalent property. So you can rent a place in the same area you want to buy for less than the mortage repayments on the house. So maybe you can rent the house for $2000 per month. Sure, you are paying $2000 per month away in rent, but if you bought you were paying $2900 in interest. So you are actually $900 better off renting even if the value of the property remains static. If it goes down you are much worse off. Its only when the value of the property is increasing (prefably faster than inflation) that you are making money and thus making money off the interest you are paying. In any other situation, I would rather have that extra $1000 in the bank saving for a bigger deposit on a home and having the bank pay me interest, than have to pay interest to the bank. I'd wait until properties are pretty much at the bottom - or at least as close as you think its going to get or perhaps on the mild upswing - before buying in this environment (IMO), but that is what I am doing.
     
  8. sevenorchids

    sevenorchids Supporting Member

    Yes, but in the US, that $2900 per month (almost $35K per year) in interest can be used as a deduction on your Income Tax. Rent cannot.

    All that being said, I wouldn't buy property in Florida anytime soon...
     
  9. Marlat

    Marlat

    Sep 17, 2002
    London UK
    Even if you are an owner occupier? That's insane. Even if house prices were dropping, it would be worth looking at buying something to create tax deductions large enough to soak up all of your income tax and rent it out, that would just make good economic sense.
     
  10. sevenorchids

    sevenorchids Supporting Member

    Yep. It's called the Home Mortgage Interest deduction. Originally created to stimulate the ownership of homes, rather than renting. One of the last tax deductions left...
     
  11. Marlat

    Marlat

    Sep 17, 2002
    London UK
    Now that is government fiscal insanity! There is no good economic reason why a person should get a tax deduction on interest on their own home it just makes it too easy to own / buy (or do you pay capital gains tax on the sale of your own home - which would then make sense?). The only country I had heard of where you could do that is Guernsey - that is awesome - I would be scrambling to buy in the US if I could deduct interest against my income tax.
     
  12. MoD_Scotty

    MoD_Scotty

    Jul 22, 2007
    Thrapston, UK
    If you take a look at some properties on zillow.com, you'll see that the prices of houses in FL are still dropping. After the hurricanes, they really skyrocketed (because the cost of building materials went through the roof), but now they're slowly sinking back down.

    Unless you find an amazing deal on a house in FL, I'd wait it out a little longer.
     
  13. Relic

    Relic Cow are you?

    Sep 12, 2006
    Robbinsville, NJ
    I'm currently in the market but here in New Jersey it's not necessarily the price of the houses that's the killer - they're getting better pricewise, it's damn property tax. Unbelievably high and it literally make the difference in what were able to afford. We have seen some wonderful houses that we completely can afford mortgage-wise, factor in the taxes and it shoots it right out of our price range.. the latest house we're looking at, it's relatively small, 4 bedrooms, full basement, 1/3 acre... taxes are almost $8000/year.
     
  14. jazzy grille

    jazzy grille - Arrogant Bastard

    Aug 15, 2006
    Sarasota, Florida
    My main reason for buying a house is to settle down, not so much to turn it around (if the market goes up) and a make a profit. I have quite a bit saved up for a down payment (roughly 100K) due to an inheritance... Plus as sevenorchids said, interest is tax deductible. :D

    I have heard from quite a few people that I should wait and I think I probably will, but houses are going for DIRT cheap here where I live. There is a very nice subdivision that is pretty isolated from the city (15min ride for groceries) and because of that the houses which "were" worth 300-400k are going for 200-250K and they are very nice. I just don't want to miss out on a good opportunity... UGH.. It's a hard decision.
     
  15. jkritchey

    jkritchey

    Jul 23, 2002
    Northern Va.
    Yeah, the interest deduction is, IMHO a contributor to the housing bubble that has caused such a problem in the financial markets. Not only is mortgage interest deductible, but Home Equity Line of Credit (HELOC) second mortgage interest was probably being deducted by many people as well. Theoretically, I believe it's only correctly deductible when used for home capital improvements, but I believe a number of people find some 'wiggle room' there when doing there taxes...

    The "American Dream" of home ownership is federally subsidized....:meh:


    Edit: My ability to use 'There, their, and they're' correctly is malfunctioning. I'm currently awaiting an upgrade patch for my brain....
     
  16. Jazz Ad

    Jazz Ad Mi la ré sol

    Move to France. We have it here too. It also exists in Germany, Spain, pretty much all over Europe actually.
    Economic reasons are very real. Homeowners work more and spend more than the rest of the population.
     
  17. Marlat

    Marlat

    Sep 17, 2002
    London UK
    Wow, I have been missing out. France is a possibility! :)
     
  18. Relic

    Relic Cow are you?

    Sep 12, 2006
    Robbinsville, NJ
    You can be Morf's neighbor :)
     
  19. Marlat

    Marlat

    Sep 17, 2002
    London UK
    He lives in the sticks. I think I will stick with Paris! :)
     
  20. MoD_Scotty

    MoD_Scotty

    Jul 22, 2007
    Thrapston, UK
    The truth! The taxes on my aunt's house in Syosset, NY are more than the mortgage on my house in Augusta, GA! MADNESS.
     
  21. Primary

    Primary TB Assistant

    Here are some related products that TB members are talking about. Clicking on a product will take you to TB’s partner, Primary, where you can find links to TB discussions about these products.

     
    Mar 3, 2021

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