Budget Baby: The Real Cost of Home Ownership

re: Budget Baby: The Real Cost of Home Ownership

katie — Wed, 09 Apr 2008 18:32:08 GMT

While mortgage interest is tax deductable, people generally over look the fact that as you pay down the loan, you pay less and less interest every year. Each has it's own pros and cons, home ownership and renting. Having just relocated to a new city, husband & I find ourselves at an impasse on buying and renting, we've done both in the past and have a temporary arrangement for the moment and find ourselves re-evaluating all of the issues and are finding we are on different sides of the fence from each other as we don't realize exactly the cost differences of insurance and taxes in this area. I believe they are more than where we are from, he hasn't grasped that fact yet when we consider exactly how much home we can afford. Being in a new city with a child, that luckily at the moment isn't yet in school and don't need to take on the daunting task of which schools are the best yet, renting will probably be the way we go for the moment as we learn more about our new area and cost differences so we can make a better, more informed decision as to the cost of the house we hopefully will buy.

re: Budget Baby: The Real Cost of Home Ownership

Jen — Wed, 09 Apr 2008 11:58:17 GMT

AAAHHH!! How can you not realize the additional costs? I spent the last few years wondering how ANYONE could afford a house and wondering what I did wrong. Wow - turns out, no one really could afford that house they live in. If you had to use a low introductory adjustable rate mortgage to get into the house, you couldn't afford the house - simple.

Renting is not throwing away money. It is paying for a place to live. And my rent is so much less than the cost of "buying" - using that term loosely. Even with taking into account the tax discount for a mortgage. So please don't feel frustrated by that. Dealing with noisy neighbors in an apartment - that's frustrating. But you are not throwing your money away, really :)

re: Budget Baby: The Real Cost of Home Ownership

Rosie — Tue, 08 Apr 2008 18:42:24 GMT

Totally agree that people don't realize. I didn't. After finding some houses in the price I wanted I realized that I most were going to need to be fixed up and have things replaced... It's a lot to take on after spending so much on a house! For now I decided I wasn't ready for the commitment of owning. However, it's so frustrating to be essentially throwing away the same amount of mortgage payments on rent.

re: Budget Baby: The Real Cost of Home Ownership

Larissa — Tue, 08 Apr 2008 17:57:31 GMT

I think as long as mortgage interest is tax deductible, the costs of owning and caring for a home will be outweighed by that benefit. Of course, that requires that one not spend beyond their means and buy a house with so much square footage or lot acre-age that the maintanence wipes them out!

I think home equity is the worst thing to happen to our non-saving, credit-spending masses. I imagine many families find themselves owing more on their homes than the could sell them for due to excesses in home equity spending.