Would you have done this?

[lendingbubblecontinues]

sdr-would you really roll every penny (my assumption) into the purchase of your next house, though?

[sdrealtor]

I’m not moving…but if I was, I would move definitely move every penny and would probably add a few. I hate debt and have adequate assets and income that I could. I cant wait until next week when I make my last car payment on what I drive now.

[sdrealtor]

I’m not moving…but if I was, I would move definitely move every penny and would probably add a few. I hate debt and have adequate assets and income that I could. I cant wait until next week when I make my last car payment on what I drive now.

[Anonymous]

Unbelievable! Financially that was a complete dumbass move! Buying any property right now is absoltely a terrible decision. I can’t belive how many clueless people are still out there. He compounded that bad decision by putting so much down payment. So as the market values continue to drop, his net worth is just going to get sucked away into the ether.

[Anonymous]

Unbelievable! Financially that was a complete dumbass move! Buying any property right now is absoltely a terrible decision. I can’t belive how many clueless people are still out there. He compounded that bad decision by putting so much down payment. So as the market values continue to drop, his net worth is just going to get sucked away into the ether.

[an]

I wouldn’t personally down anymore than 20%. Why put all your chips on one hand? The interest in the addition $400k in mortgage after tax deduction would be about $1300/month @ 7%. The interest you would make minus taxes in a saving account @ 5.3% would be about $1500/month. So, it’s a wash, but you have that money in cash just in case an opportunity/hardship comes up. If you bump that 5.3% up to 10%, it would make that much more economical sense to not down the whole 400k.

[an]

I wouldn’t personally down anymore than 20%. Why put all your chips on one hand? The interest in the addition $400k in mortgage after tax deduction would be about $1300/month @ 7%. The interest you would make minus taxes in a saving account @ 5.3% would be about $1500/month. So, it’s a wash, but you have that money in cash just in case an opportunity/hardship comes up. If you bump that 5.3% up to 10%, it would make that much more economical sense to not down the whole 400k.

[NotCranky]

sdr,
If you sold, the temptation time the market woudln’t affect you at all? I’d take a big chance that the “2 for 1” sale was coming to a zip code near me!

[NotCranky]

sdr,
If you sold, the temptation time the market woudln’t affect you at all? I’d take a big chance that the “2 for 1” sale was coming to a zip code near me!

[PerryChase]

I agree with bugs and cyphire.

It’s not a bad deal for him. He took the profits and traded up. He cleared $410k on the condo and did not piss it away. If he bought an $800k house he might loose $300k of that when the market drops. He’ll do fine because he still would be up $100k.

Personally, I wouldn’t ‘ve bought the house.

The problem with the recent market is that many buyers leverage their gains into bigger and bigger homes using exotic loans. When the market drop, they’ll loose all the gains and more.

I know one couple who started with a $350k house in 2002. Now they live in a $1 million house with no change in income. Their income is not that stable so a recession and a loss of income would turn their house into must sell inventory at the worst of times. Children will hit HS graduation and college age in about 4 years. That’s when they’ll NEED money.

[PerryChase]

I agree with bugs and cyphire.

It’s not a bad deal for him. He took the profits and traded up. He cleared $410k on the condo and did not piss it away. If he bought an $800k house he might loose $300k of that when the market drops. He’ll do fine because he still would be up $100k.

Personally, I wouldn’t ‘ve bought the house.

The problem with the recent market is that many buyers leverage their gains into bigger and bigger homes using exotic loans. When the market drop, they’ll loose all the gains and more.

I know one couple who started with a $350k house in 2002. Now they live in a $1 million house with no change in income. Their income is not that stable so a recession and a loss of income would turn their house into must sell inventory at the worst of times. Children will hit HS graduation and college age in about 4 years. That’s when they’ll NEED money.

[sdcellar]

asianautica– I’d check your math. Doing that he’s losing roughly $400 month. I also like how you were conservative low on the loan rate and agressive high on the savings interest rate. And if you can find me a guaranteed liquid 10% return, let me know.

[sdcellar]

asianautica– I’d check your math. Doing that he’s losing roughly $400 month. I also like how you were conservative low on the loan rate and agressive high on the savings interest rate. And if you can find me a guaranteed liquid 10% return, let me know.

[sdrealtor]

Rustico,
If the 2 for 1 sale came along I’d be ready for that also. In fact, I’d do what my wife does. I’d buy 2, one in each color.

[sdrealtor]

Rustico,
If the 2 for 1 sale came along I’d be ready for that also. In fact, I’d do what my wife does. I’d buy 2, one in each color.

[Author]

Posts