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$1m is like a $3000/mo stipend of dividends. Spend your days teaching guitar and playing and not have to worry about money.
How much is enough in life?
- Thread starter evil wasabi
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$1m is like a $3000/mo stipend of dividends. Spend your days teaching guitar and playing and not have to worry about money.
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The cheaper the house, the better.
https://www.investopedia.com/terms/...r is a term,taxes, maintenance, and utilities.
https://www.investopedia.com/terms/...r is a term,taxes, maintenance, and utilities.
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That ignores how much money you can make on property due to the leverage potential that isn't available to most people in most other investments.
I'm not saying that's always a good thing, but it has made a generation of people accidentally rich. If I'd missed that gravy train I'd be tearful right now.
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So...bad choices?
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Little leeches I tell you!
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Nah, primary residences are not investments.
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I've tried to get this point across to you before. Outside of food you can make almost every purchase an investment, and if you're not, you're fucking it up.
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Your primary residence is only an "investment" in that the net cost of ownership is cheaper than renting (after about a few years).
All things being equal, Getting a more expensive house isn't any better an investment than a cheaper house.
And when you go to sell, the cheapest house in the neighborhood is usually the fastest to sell.
All things being equal, Getting a more expensive house isn't any better an investment than a cheaper house.
And when you go to sell, the cheapest house in the neighborhood is usually the fastest to sell.
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That would be a solid point without the 'all things being equal', which they aren't.
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"All things being equal" means that the houses are in the same market, or of equal state of of repair, or that there isn't an unexpected shift towards more expensive or less expensive houses in said market.
More House=More taxes=more upkeep=more utilities=more opportunity costs.
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My mortgage with interest, taxes and insurance is about $600/month.
My auto payments with insurance are about $800 a month.
My auto payments with insurance are about $800 a month.
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There are very few things in the UK that you can borrow 4-5 times your annual household income against, outside of property. Ignore that at your peril.
I cannot speak for the tax implications of this in the US though, admittedly.
I cannot speak for the tax implications of this in the US though, admittedly.
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I can borrow much easier against my signature than against my house.
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I'm not surprised, your house sounds like a shack
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Your primary residence has to increase in value beyond inflation, taxes, and the mortgage payments in order to be a profitable investment. Otherwise it’s a bad investment.
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It doesn't matter. Your house can be worth 1,000,000
-Try borrowing $20,000 against it and the bank will want appraisals, property tax documents, 2 years of income tax statements, a search for liens against it.
I can get a line of credit right now for $20,000 with nothing more than a signature.
$30,000-$50,000 with just a few income statements.
I can massage the auto payments to improve the way my affordability calculations look to creditors. You can't massage a bloated mortgage in the same way.
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$30-50k? I'm talking about money to invest, not to buy a shitty car.
If you earn say $100k a year you can borrow $500k against your $1m house, at 2% per annum or less last time I looked. You can start to make an actual difference to your life when investments start reaching those numbers.
I'll say again though, I don't know about the tax implications etc in the US, and if they fuck it then so be it.
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In this country, You can't easily borrow $500,000 against a 1 million dollar house unless you have nearly that amount paid off in "Equity".
Of course, to pay off $500,000, you would have had to have paid $500,000 in excess of interest, taxes, upkeep, utilities, and god knows what else. Or the property would have had to appreciate substantially.
Of course, to pay off $500,000, you would have had to have paid $500,000 in excess of interest, taxes, upkeep, utilities, and god knows what else. Or the property would have had to appreciate substantially.
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We have what I assume are the same two classes of debt here, secured and unsecured. Unsecured debt, if defaulted on, is written down to zero after 7 years if no payments are made, and all records expunged, by law. Secured debt means the obvious, they take away whatever it's secured against if you default repeatedly.
At some point they realised that allowing people to default on a $500k loan against a $1m house that they then get to repossess was pretty good business, compared to people every seven years taking their 25k and walking away scot free. I'm amazed american banks aren't in on this. I can only assume the credit record deletion isn't the same.
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Each tax district sets rates based on value of the home. They may include: Village, Town, County, School, and [I think] state.
They take the total amount to be raised by tax and divide it by the aggregate appraised value.
The rates are generally set at $x per $1000 in appraised value.
Districts with lots of expensive housing have a cheaper tax rate, but often have higher overall taxes.
Then sometimes, there are small potato special utility districts that assess at property tax based on other criteria (for instance a rain sewer tax that charges based on the amount of roof an asphault surface area). Or a recycling tax that charges per family unit.
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American banks were on it. It was the root of a global financial crisis.
Repossessing houses in a collapsing housing bubble is an expensive proposition.
After that, the underwriting standards for houses got really strict.
We bought our house in 2014 for $80,000 (about $7,000 net down).
They wanted so many documents. We even got hung up for 3 months because my GF got hired on a permanent basis by her employer of 12 months. (Since she technically had a "New Employer).
I could easily walk into a car dealership and get a loan for two $40,000 cars with with nothing more than a credit check and signature.
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The issue there being the scope for housing prices to drop double digit percentages.
We don't have that in the UK.
Notes from a small overpopulated island.
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Well, the banks convinced themselves that they could take out insurance against potentially bad loans that would cover the cost of the bad loans. And then, the could sell options on that insurance along with options on the loans themselves.