Worried | Imamother

amother

Junglegreen

Tue, May 24 2022, 1:07 pm

amother [ OP ] wrote:

I'm wondering that as well. 150k home paying so much in taxes is a head scratcher.

Most of my neighbors bought their homes 20+ years ago far from the center of lkwd. Going to shul was a hike back then and Friday night was in someone living room.
Today it is considered center of town. With really nice properties.
I bought my home many years ago at height of market in 2000s. It went way down and up in value. But not much (my property is lousy in comparison) . But my taxes have doubled since I bought it. (I’ve done no work and don’t have a rental)

(My in laws bought their house near yeshiva for 30k Smile

It is priceless today. Can’t even put a price)

The increase doesn’t help most ppl. They don’t want another mortgage. They are yeshiva ppl. And have no want or need to move. And we’re will they go. After 120 their kids will benefit.

amother

Tue, May 24 2022, 1:12 pm

snailmail wrote:

Its the American dream right, don't rent buy buy a house!
But I believe it is all marketing ploy. Owning a home has its own slew of problems & costs. The water pipe breaks - YOU need to pay to fix it. The hot water tank breaks - YOU need to replace it. The AC breaks. The roof leaks. The windows are drafty. The tap drips. You have to fix it all. You can no longer call the landlord and tell them to fix it, or not paying rent until it is fixed. New houses and old houses both can have problems.

The other thing with paying mortgage, after 30 years, you could end up paying more than double the asking price of the house - just for the cost of the house itself with all the interest. So while you do own the house at the end, you have paid the bank a lot more than what the owners who sold it to you got.

Rent goes up - but so does property tax. So after you finish paying off your mortgage - you could still have a $28,000 property tax bill. Having your property value has go up is not always do good as your taxes will go up - unless/until you are ready to sell. Eg Buying a house for $600,000 and then a few year later it is now worth $1.2M is not good for your taxes. Only good for you if you are selling. However, if you need the money to make renovations, then you could also take out a second mortgage (or refinance) on the higher value of your home.

You always need to be able to afford the monthly payments - whether it is for rent or mortgage, credit card or loans.

I hear you, but how is it different to pay a landlord over the course of 30 years vs paying interest over the course of 30 years? At least with a house after 30 years of interest, you own it and have a nest egg. After 30 years of renting, a 60 year old couple will likely need to continue to rent for another 30 years (and god forbid will need to rely on their children to support them in their old age when they can no longer work and make the rent payments). The biggest perk for me of owning a home is that you're not at the mercy of potentially being asked to move out, and have to scramble and find a new place to live that fits your families needs. My good friend with 8 kids had that happen to her recently, and it was a horrible experience. She ended up moving to a smaller place that unfortunately isn't big enough for her family, because that was all that was available at the time. The upheaval was very difficult for her physically (she was pregnant when she needed to pack of 12 years and 8 kids worth of stuff) and emotionally, and her older kids were furious that they were leaving the neighborhood they grew up in. One of my favorite things about owning a home is the knowledge that I am building my principal each month, and imyh after 120, my children will be left with something.

amother

Junglegreen

Tue, May 24 2022, 1:15 pm

snailmail wrote:

They probably refinanced and/or had a tax reassessment.

The amount of tax also depends on the village / town / county / state you live in. In NYC you pay income tax, but property tax is pretty low. Out of NYC in NYS you don't pay income tax but you pay much higher property tax

Lakewood does tax reassessments every few years. They send out ppl to look at properties and recalculate worth based on recent sales. I’ve had it done at least 4 times since I bought my house each time with a significant increase.

snailmail

Tue, May 24 2022, 1:20 pm

amother [ OP ] wrote:

Yes you are right. Building a nest egg with increased property value is a long term investment. But I bought a house (and subsequently sold & moved, bought again) and owning and maintaining a house is a full time job and we have ended up shelling out for one repair after another. Hopefully will pay out in the long run. Owning in a jewish area is almost guaranteed a good return on investment. I know someone who would buy, renovate & flip about a year or so later for a lot more. Its not for everyone, but it can be done to make money too.

amother

Chambray

Tue, May 24 2022, 1:33 pm

amother [ Amber ] wrote:

I am/was also on the market to buy in the greater Lakewood area, but when interest rates shot up I called off my search.

I don’t think house prices will go down, but I’ll calmly wait until interest rates drop before I continue my search.

My budget for mortgage payments now allows me close to $100,000 less of a purchase price with such high interest rates. And said budget was preinflation so it’s not really accurate anymore.

Exactly. When people buy a house, they are more concerned with their monthly payment than the actual cost of the home. So if I can afford $3000 a month, 6 months ago that allowed me to borrow around 600k. With rates higher it only allows me to borrow 500k. So there's less demand. On the other hand if an area like Lakewood is swarmed with buyers because there are only a few places in the entire country that have similar communities, (are there any) prices won't go down because there are still many more buyers than sellers.

amother

Junglegreen

Tue, May 24 2022, 1:39 pm

amother [ OP ] wrote:

Wow - good to know ahead of time. Can I ask which general area of Lakewood you live in that you were reassessed so many times? Does this happen to most people? Or were your multiple reassessments the "Yotzei min haklal"?

I’m pretty sure the reassessment is scheduled.

I found this online
Calculations of property assessments are annually based upon market trends and will be reflected in the following year's assessment. Due to the New Jersey Division of Taxation guidelines for the program, each property will be inspected once every five years.

You can hire ppl to fight it if you feel were improperly adjusted. But you have to be ready to allow ppl in your home to inspect when you do fight it.

amother

Sienna

Tue, May 24 2022, 1:46 pm

Op I was you 18 months ago right before I bought and I'm so relieved I did.
My quality of life really improved when I bought and moved. The location is better for me especially on Shabbos or when I need help (baking ingredients, babysitting) in a pinch.
We have a parking spot. A bit of yard to plant in. A porch that fits a sukka that the whole family fits in. Another bedroom so the baby doesn't wake everyone up.
Yes, it took every last penny we owned plus some extra loans, but due to inflation that money would have been worth less now anyways.
We were told that the same way we trusted Hashem to have the amount of children we do, we trust Him to guide us to be able to house them comfortably. Both are a leap of faith and bh we've been greatly blessed in both areas.
There's no way to know if we are missing better deal, but we do what we can with what we have. Hashem who made it possible up until now will make it possible further. If it makes 90% sense I'd say go for it.
Btw I've read that married men earn more than single guys. I think it's because a bit of financial pressure is good for your career growth. So if you can swing it, but it's tight, that might be the keli to get you to go places you wouldn't have been able to before.
(This is all assuming that it's within your reach but tight, not that it would take the bread off of your table).

amother

Freesia

Tue, May 24 2022, 1:46 pm

amother [ Chambray ] wrote:

The problem still remains during inflation.
Let's say I have an income of 10k post tax a month. I have a 3k mortgage, 2k insurance, 3k tuition and 2k food bill a month. (I know it's simplistic but let's do it). So I can afford the 3k mortgage but there's no extra money to wiggle.
Now 6 months down the road my tuition is 3.5k, my insurance is 2.2k and my salary is the same. So now Im really struggling. And I'm left with only $1300 a month for food. And absolutely nothing extra for the leaky roof.
That's the problem with committing to a tight mortgage.

amother

Chambray

Tue, May 24 2022, 2:03 pm

amother [ Freesia ] wrote:

Good point, although renters will have the same inflation problem, no? True, buyers often extend themselves more, but many people -both buyers and renters- can't afford to lose 10% of their purchasing power to inflation.

amother

Freesia

Tue, May 24 2022, 2:11 pm

amother [ Chambray ] wrote:

A renter technically has the flexibility to downsize or to move out of town without incurring a loss.

It's not easy but it's a lot more doable than a mortgage -payer.
Not to mention government programs and safety nets that are available for genuine hardship in NJ for renters.

I do know that several school administrators told me that they can't afford to be as lenient on tuition to "house rich, cash poor" families as they used to and they're starting to take into account size of house, mortgage payment and such into account.

amother

Emerald

Tue, May 24 2022, 2:18 pm

amother [ OP ] wrote:

Reassessment plus changing the tax formula happens in lakewood. Abount 5 years ago there was a reassessment of all lakewood houses, and then about 3 years ago everyone's home/property values were automatically raised by the township and the tax rate lowered. This led to a slight tax decrease for some and slight increase for others. Each year taxes go up more. What I want to know is - do people realize when they buy a new home that their taxes are going to go up based on what they paid for the house and not stay at the pre-sale assessment amount? Because those increases are huge in most cases.

amother

Tue, May 24 2022, 2:18 pm

amother [ Freesia ] wrote:

Downsizing is a loss. Moving because you have to and not because you want to is a HUGE loss.
People buying houses with obscene mortgages, and apply for financial aid for tuition (especially if they knew going into the mortgage that they would need financial aid), are wrong. But thats another discussion.