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| First house for a young man |
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| rstofer:
--- Quote from: tronde on July 06, 2017, 10:12:19 pm ---Since bluescull can't get any kind of loan, the house should be rather safe from the banks as long as he also owns the land. --- End quote --- Owning the land is traditional. Oddly, owning the mineral rights below the surface isn't. That's just one of those things to look for. I doubt that it matters but who knows? The problem with owning the house outright is that Bluescull takes all the risk. Yes, there will be some kind of insurance but that doesn't cover downturns in the economy or downturns in local housing costs. Having 100% equity doesn't seem like a good thing until you are older and less able to make mortgage payments. Also, he loses the mortgage interest deduction. The interest deduction isn't a reason for buying a house but it certainly enters into the math. If your marginal tax rate is, say, 35%, then in the early years when the mortgage payment is nearly all interest, the .gov is making 35% of your house payment. Basically, the deduction reduces your income subject to taxation and, as a result, you pay less taxes. Of course, you are still paying the interest. In the bad old days of the '80s, when mortgage rates were up around 18%, the math got very interesting! https://finance.yahoo.com/blogs/just-explain-it/why-mortgage-rates-matter-152241574.html |
| tronde:
We had 100% interest deducting in Norway too. It ended with a lot of smoke in 1987/88. Lots of people lost their homes. Now we can deduct 24% of the interest. What is the best of having a loan or to pay cash is never known before the loan is fully paid back. If people invest in something just because they can save on taxes it will quite often end up with a bigger loan because it gives the impression of the thing being cheaper. It is a lot of psychology involved in this. For bluescull this does not matter. If he want a house he will have to cash out. As I understand him, this house is meant to preserve as much as possible of his savings and to give him a roof above his bed. He also think he can get some money from chinese students to help with the expenses. That makes sense for me. He knows best how he will share his home with other people, and I think chinese people look different on how to share a place to live than what western people does. If he finds home-sharing to be OK, it can give him money to pay for the fixed costs of owning a house. The biggest uncertainty for him will be how long he can stay in the US. |
| WastelandTek:
--- Quote from: cdev on July 06, 2017, 09:53:05 pm ---Tronde, Here in the US it emerged that several banks - big banks, were actively committing fraud so that more people would be foreclosed on so they could take the entire asset. They totally got away with it. It was their word against the banks and the banks got away with it. Even when one very large US bank was forced to pay a settlement, it worked out to around $300 per family foreclosed on. They had paid off their mortgages or made the payments on time they were supposed to - but still lost their homes. How much was their compensation? This was in a case where the bank was officially declared "Guilty" and there was no debate that they had deliberately pretended families who had managed to get their payments in on time, often having gone to great trouble to get that money, had failed to. the bank abused their power and the trust people had put in them to declare them in default and foreclose on the houses which often then went to ruin, not being occupied they became flooded or targets of metal thieves, etc,. often serving as a magnet for homeless people and destroying the value of other homes in their communities.. How much did the banks have to pay for this behavior? So little as to be almost less than nothing. The bank was forced to pay a settlement that worked out to a very small sum, of which the lawyer who brought the class action lawsuit got around a third. The payment was a few hundred dollars per family. --- End quote --- This is a bit off topic, but bears repeating. I personally know people who MADE THEIR PAYMENTS and got swept up in the mass forclosure rubberstamp shiteshow anyway. Bloody thieves, hanging is too good for them. |
| cdev:
Because of my shortwave listening hobby when China sent in the tanks to crush (literally) the protesters in June 1989, my friend and I were among the first Americans to protest here in the US. On that day (maybe 500 people by the end of the day) and the next (30000) I met a lot of Chinese students who were protesting for democracy. I still have a bunch of flyers I was given that day, Most were in both Chinese and English. I could scan them in. |
| mrpackethead:
Invest in Oscilloscopes. Its the future. |
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