I resisted this concept. I now embrace it grudingly. Price is meaningless. What you pay each month is all that matters.[/quote]
But price, along with interest rates, is what determines what you will pay each month.[/quote]
Its not that its totally unrelated but that its a secondary (or tertiary) consideration in determining effective demand.
I frankly could give a shit about the overall price of the place I buy.
I know what people focus on but it makes no sense.
Lets take an example:
The price is 2 mil on a 3br/2BA place in NP (say Morley field near the park).
The loan is a 15 year IO at 1% (call it crazy seller financing)and you qualify for it.
The house is clearly overpriced but you would be fool not to buy it on those terms.
At that price you could get rich just renting it out.
The overall price here would be immaterial.[/quote]
I’m overstating things. I did used to think the price had some independent reality, like it was a number that really meant something in and of itself in a way unrelated to other numbers..
i was wrong..
20% of that number (the purchase price) meant something, actually, as that was the amount of cash i had to write a check for, to put 20% down.
but the total purchase price it is just a strange symbol , some theoretical sum conjured from the dark shadowy mists, like a flute song in dark eastern european woods..
The monthly payment is reality , something penciled out by pale men wearing green visors in brightly flourescent lit rooms; grim, sober reality….a number you see repeatedly in your bank account on the withdrawal side, a number you get used to. . reality. life.
i love my monthly payment. the more i think about it, get used to it, it’s a number that soothes me, a number that makes me feel like everythings going to be all right.
I still haven’tquite wrapped my head around the actual purchase price. it’s a number i have no feel or feelings for, it is distant, remote, uncommunicative, imposing.
the monthly payment is part of my daily life, a buddy, something I can easily get a grip on. the monthly payment is a number i pay, i like to pay, i actually enjoy paying it. when i pay the mortgage, i don’t think, goddamnit, now i gotta pay the mortgage? ! i think what a reasonable rpice, how happy i am to lvie here and pay this amount on these terms…. i am filled with happiness to pay it.
the purchase price is no more than a placemarker, a holder, a number that might possibly come into play in the future, if im still alive, not just a skeleton in the family library, in order to settle up.
who cares at that point? im dead. the purchase price is never going to matter to me probably, because i am never going to sell this house.
true the monthly payment is in some way related to the purchase price, but who cares. it might as well be related to the stars, or the tea leaves. don’t tell me about what it’s related to, for i do not care. all i should have cared about is what does it cost per month and what must i put down.
