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What’s the benefits to buying a house?



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amother
Goldenrod


 

Post Thu, Jul 12 2018, 6:37 pm
That’s my question. Now that the standard deduction for this year is higher... what’s the push to buy a house vs. renting?

What is your financial benefit?

Thank you 😊
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amother
Taupe


 

Post Thu, Jul 12 2018, 7:27 pm
You own something - that if you are lucky will go up in value. That's a financial answer. There are whole bunch of other answers.

And if your mortgage is large, say 600,000 you will probably be paying more than $24,000 a year in interest on that loan.
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mha3484




 
 
    
 

Post Thu, Jul 12 2018, 7:42 pm
My mortgage is cheaper then renting.

Also our quality of life is much improved. We have more space including a full basement and back yard, live in a nicer part of my neighborhood with with better neighbors and less noise, no landlord who drove me nutty. It’s a major improvement in so many ways.
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amother
Taupe


 

Post Thu, Jul 12 2018, 7:47 pm
Whats neat about paying down a mortgage is at some point - it ends! Rent...doesn't...ever...go...away.
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amother
Mistyrose


 

Post Thu, Jul 12 2018, 7:48 pm
mha3484 wrote:
My mortgage is cheaper then renting.

Also our quality of life is much improved. We have more space including a full basement and back yard, live in a nicer part of my neighborhood with with better neighbors and less noise, no landlord who drove me nutty. It’s a major improvement in so many ways.



But what does owning have to do with most of what you said? Why can't someone rent a house with a basement, backyard, in the nice part of town, nice neighbors with little noise and have a nice landlord?
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OutATowner




 
 
    
 

Post Thu, Jul 12 2018, 7:52 pm
Stability. Rent can go up. The landlord might kick you out. With a mortgage you know what you have to pay every month. It may change within a few dollars due to taxes etc, but no one is raising it by the hundreds.
You are (slowly) acquiring an asset. Think of it as the principle from your mortgage payment goes into an imaginary bank account that you can possibly use in the future (sell, etc).
As a pp said, it may take a while...but iyH it ends!
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Orchid




 
 
    
 

Post Thu, Jul 12 2018, 7:53 pm
amother wrote:
But what does owning have to do with most of what you said? Why can't someone rent a house with a basement, backyard, in the nice part of town, nice neighbors with little noise and have a nice landlord?


You're always living with the thought that your landlord may decide to up and sell. This happened to friends of ours..who are in their mid 60s. Really tough to know that you don't own your own place.
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amother
Periwinkle


 

Post Thu, Jul 12 2018, 7:58 pm
amother wrote:
That’s my question. Now that the standard deduction for this year is higher... what’s the push to buy a house vs. renting?

What is your financial benefit?

Thank you 😊


I'm still itemizing. Plus my mortgage stays the same year after year and if I was renting, it would be a variable and continuously increasing expense.
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amother
Vermilion


 

Post Thu, Jul 12 2018, 8:06 pm
Being able to make changes, and know that it is yours.

For example, we won't put in a milchig kitchen into our rental home, because we have to get permission and landlord can discontinue our lease at the end of any given year. Improvements to your own home are worth doing.
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chocolatecake




 
 
    
 

Post Thu, Jul 12 2018, 8:57 pm
Forgetting all financial reasons, just think of the peace of mind that you will have that no one can ever throw you out. I have a neighbor in her sixties whose landlord sold the house and she was forced to move.
Also, you won’t mind putting work into the house if it’s yours. I am renting now and there are so many little things that I would love to do but I’m not interested in spending money to improve someone else’s house.
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amother
Pearl


 

Post Thu, Jul 12 2018, 9:08 pm
Appreciating asset (our house is worth almost $100K more now than when we bought it 3 years ago)

Stable predictable payment (although our taxes fluctuate yearly)

Like PP said, ability to make changes and upgrades (yay milchig sink and basement bedroom!)

No landlord

The end of the mortgage. We have a 15 year fixed mortgage, which means that in 12 years we will own our home and drop the P from PITI. We'll be paying less than $500 monthly. Considering that our children will be in shidduchim, yeshiva, seminary etc around that time, the ability to reallocate that money is a huge benefit.
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amother
Burgundy


 

Post Thu, Jul 12 2018, 9:30 pm
Stability!
I’ve rented in several places and always felt screwed over. Landlord doesn’t fix major things immediately (like AC in the summer) and we pay out of pocket. Then landlord decides to sell with the newly repaired AC that I paid for and I get kicked out.
Landlord uses cheapest plumber so issue never gets fixed properly and I have to live with it.

We are about to move into our own home and I can’t wait to not be at the mercy of a landlord anymore.

Also our mortgage will be less than our rent for a much much nicer house.
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amother
Floralwhite


 

Post Thu, Jul 12 2018, 9:34 pm
Many people aren’t saving properly for retirement. Their retirement plan is their house. Many people who bought houses in Brooklyn are now selling their houses, downsizing and moving somewhere cheaper.
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amother
Aqua


 

Post Thu, Jul 12 2018, 9:43 pm
We can borrow $$$ through a home equity loan to pay for simchas or other large expenses. It helps us bc we don't have any other savings.
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Orchid




 
 
    
 

Post Fri, Jul 13 2018, 4:57 pm
amother wrote:
Many people aren’t saving properly for retirement. Their retirement plan is their house. Many people who bought houses in Brooklyn are now selling their houses, downsizing and moving somewhere cheaper.


Housing values can and do go down.
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Bsimcha




 
 
    
 

Post Sat, Jul 14 2018, 7:36 pm
Prices can go up and down, but usually go up over time, can ride out fluctuations.
If someone stays in a house for many years, it will definitely appreciate.

As others have said, equity buildup, being able to borrow against equity, not having to worry about being kicked out by landlord and ability to renovate to your liking.
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watergirl




 
 
    
 

Post Sat, Jul 14 2018, 7:45 pm
Our mortagage is less than our rent has ever been. And echoing what everyone else said.

Our last landlord’s DAUGHTER was constantly telling me how she’s ready for her father tonsell the house already because they need the money! How can anyone feel comfortable living somewhere when you know that the clock is ticking! My best friend is renting from a divorced couple - the house is the bone on contention in their 10 year old divorce. She knows that it any minute, that bone of contention could settle and she would have to move. This causes so much anxiety!
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amother
Goldenrod


 

Post Sat, Jul 14 2018, 8:38 pm
Thank you to everyone for your response.

I was wondering if it’s better to wait till you have a more sizable down payment - thus having a smaller mortgage or buy now (if we find a house) and pay a larger mortgage - and perhaps pay more each month (with the extra money that we are now putting away for a down payment) if you can even do that?
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amother
Taupe


 

Post Sat, Jul 14 2018, 9:22 pm
amother wrote:
Thank you to everyone for your response.

I was wondering if it’s better to wait till you have a more sizable down payment - thus having a smaller mortgage or buy now (if we find a house) and pay a larger mortgage - and perhaps pay more each month (with the extra money that we are now putting away for a down payment) if you can even do that?


There are mortgages that allow you to pay down the principal on top of your regular payments (which are interest and principal). You need to understand the terms of the loan you get.

Keep in mind - every month you are not paying down a mortgage, you are paying rent... (but if rent is 2000 per month and mortgage payment right now you'd expect to be 3000 per month, most of which being interest - there is a good argument to wait it out a big - but really depends on how long, and how much lower you think your going to get that payment)

Most people would advice - if you qualify now for a house that you want - go for it.

(to your initial comment - people often did not accelerate the payments of their mortgages because of the deductible interest. Between your property tax, mortgage interest and donations, you still may find yourself itemizing, even though the standard deduction has doubled).
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shanie5




 
 
    
 

Post Mon, Jul 16 2018, 7:36 pm
amother wrote:
Thank you to everyone for your response.

I was wondering if it’s better to wait till you have a more sizable down payment - thus having a smaller mortgage or buy now (if we find a house) and pay a larger mortgage - and perhaps pay more each month (with the extra money that we are now putting away for a down payment) if you can even do that?


If you have a 30 year mortgage, and pay 1 extra principal payment a year, you can likely pay off that mortgage in 20 years. One way to do that extra payment is to pay half the mortgage every 2 weeks instead of once a month. Every 2 weeks will make it 13 months of payments a year. you just have to designate 2 of those payments as principal only.
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