[cyphire]

I guess your right – for most people it isn’t the way to go. I haven’t been in any house longer than 6 years – so thats the appeal for me. And I couldn’t imagine being in the same house too long – whether prices are going up or down. But because they are going down (with my short term mindframe – I would never buy a house in this market.) Lets see what 2 years has to offer.

Also – my equity is my company – not my house. I would rather take the excess and build up savings / portfolio and then sell the house in the future with my cost basis being my mortgage. If you are in it for the next 30 years – I would agree int only isn’t the way to go.

[cyphire]

I guess your right – for most people it isn’t the way to go. I haven’t been in any house longer than 6 years – so thats the appeal for me. And I couldn’t imagine being in the same house too long – whether prices are going up or down. But because they are going down (with my short term mindframe – I would never buy a house in this market.) Lets see what 2 years has to offer.

Also – my equity is my company – not my house. I would rather take the excess and build up savings / portfolio and then sell the house in the future with my cost basis being my mortgage. If you are in it for the next 30 years – I would agree int only isn’t the way to go.

[cyphire]

I disagree. If you have the financial acumen, interest only is the way to go. Keep saving money each month, build up equity outside of your home. Do you plan on staying in this house for a very long time? If not, interest only is better. Why use your house as a savings account? Now that being said – if you are only paying interest only you better be saving! If you find yourself spending all your income each month, then you bought too much house.

By the way deadzone – I had an interest only mortgage for the last 2 years. I could afford 2 houses or more at that payment level – but I still don’t like the fact that if you stay in the house short term you increased your payment but really didnt get any equity relief.

[cyphire]

I disagree. If you have the financial acumen, interest only is the way to go. Keep saving money each month, build up equity outside of your home. Do you plan on staying in this house for a very long time? If not, interest only is better. Why use your house as a savings account? Now that being said – if you are only paying interest only you better be saving! If you find yourself spending all your income each month, then you bought too much house.

By the way deadzone – I had an interest only mortgage for the last 2 years. I could afford 2 houses or more at that payment level – but I still don’t like the fact that if you stay in the house short term you increased your payment but really didnt get any equity relief.

[cyphire]

What I am amazed at is the people who are still buying. We just moved into a rental, the previous tenants just bought a house here in LJ.

Don’t they know what is going on?

[cyphire]

What I am amazed at is the people who are still buying. We just moved into a rental, the previous tenants just bought a house here in LJ.

Don’t they know what is going on?

[cyphire]

Well said patientrenter… Same with me. We just moved into a house in La Jolla which would probably cost 2.5M. Using the above numbers – it would cost 200K per year int/only, taxes, maint. I am using the entire home cost in the calculation, because any amount down would reduce my investment income as it would be tied into the house. Only the interest on the first 1,000,000 (and an additional 100,000 equity) is deductible. If you are in the AMT situation, not even that 1.1 Million is all deductible.

This house is costing 6.5K / month to rent. Even grossing that up by 40% would be equivalent to 9.1K. Much better deal than 18,000 / month for a purchase.

The more important issue is that house prices have to appreciate over 6% per year minimum to make buying a better proposition. If that 2.5M house decreases in value to 2.3M, that is a 200K hit to equity, but still having a mortgage of 2.5M (or whatever was not put down as downpayment.

[cyphire]

Well said patientrenter… Same with me. We just moved into a house in La Jolla which would probably cost 2.5M. Using the above numbers – it would cost 200K per year int/only, taxes, maint. I am using the entire home cost in the calculation, because any amount down would reduce my investment income as it would be tied into the house. Only the interest on the first 1,000,000 (and an additional 100,000 equity) is deductible. If you are in the AMT situation, not even that 1.1 Million is all deductible.

This house is costing 6.5K / month to rent. Even grossing that up by 40% would be equivalent to 9.1K. Much better deal than 18,000 / month for a purchase.

The more important issue is that house prices have to appreciate over 6% per year minimum to make buying a better proposition. If that 2.5M house decreases in value to 2.3M, that is a 200K hit to equity, but still having a mortgage of 2.5M (or whatever was not put down as downpayment.

[cyphire]

I’m an owner of a turnkey software company. We employ over 150 people almost all of whom have college degrees except for yours truly (and one of my other partners). My partner and I started the company in the mid-80’s. The company is not located in CA. So i’m up there in compensation with a bunch of multiples – but I’m not one of those people who make insane money. i.e. I could not buy a nice house on the water.

[cyphire]

I’m an owner of a turnkey software company. We employ over 150 people almost all of whom have college degrees except for yours truly (and one of my other partners). My partner and I started the company in the mid-80’s. The company is not located in CA. So i’m up there in compensation with a bunch of multiples – but I’m not one of those people who make insane money. i.e. I could not buy a nice house on the water.

[cyphire]

Have fun at the party… If the FBI has time to monitor this blog, they have too much time on their hands!

Instead of unpacking I have been playing Halo. Its my way of fighting “the war on terror”TM If I let anyone get the rocket launcher the terrorists win.

Rent vs. Buy – one reason that renting seems to work for me now is that while I am spending some money getting this new house in shape for my needs, I will only spend so much as it isn’t my house. I spend money like a drunken sailor – renting a house definitely holds back my primal urges.

Additionally – while I don’t get any appreciation in the house (moot point because as most of us agree appreciation is out the window for a while) – I also don’t have to spend any money to fix it as it ages.

The rent isn’t cheap but probably am paying 40% of what the mortgage / taxes would cost me.

Back to the unpacking….

[cyphire]

Have fun at the party… If the FBI has time to monitor this blog, they have too much time on their hands!

Instead of unpacking I have been playing Halo. Its my way of fighting “the war on terror”TM If I let anyone get the rocket launcher the terrorists win.

Rent vs. Buy – one reason that renting seems to work for me now is that while I am spending some money getting this new house in shape for my needs, I will only spend so much as it isn’t my house. I spend money like a drunken sailor – renting a house definitely holds back my primal urges.

Additionally – while I don’t get any appreciation in the house (moot point because as most of us agree appreciation is out the window for a while) – I also don’t have to spend any money to fix it as it ages.

The rent isn’t cheap but probably am paying 40% of what the mortgage / taxes would cost me.

Back to the unpacking….

[cyphire]

Opps – sorry all – I have inflamed the religion aspect (I do admit a very strong bias – there are two worlds – the world of people who believe the dogma, and the world of people who consider it fantasy. These worlds will NEVER agree). This is a real estate blog and I will endevor to back off the anti-psalm singing as much as I can! Mea Culpa JG.

Bush is a horrific president – this has nothing to do with Religion. Conservatives do not all embrace religion – they are different topics. I am conservative in some of my beliefs, but am liberal in many. I do believe that the right wing (much of conservatives and Republicans) are ultimately based on greed – pure and simple. People vote their pocketbooks and most unfortunately many vote against their pocketbooks (without realizing it) because of disinformation, fear mongering, and carrots being held out to them. Amazing the vast number of people that vote Republican because of fear of higher taxes, changes in capital gains, more socialism, etc. when they are in the vast bracket which would benefit from them.

I don’t drive a Prius – but would support across the board legislation to clean up the environment both here and abroad. We have clean air rules here in this country – but we buy ALL our stuff from China and allow them to do what they want. Imagine if we required the Chinese to conform to strict environmental standards in order to buy each item they produce. We would have somewhat competitive marketplaces and we would from a business prospective increase business, not decrease it.

Again – FormerSanDiegan – no more religion here from me (unless attacked so everyone – don’t do it!). I’m not sure how much of the tulip story paralleled theBushMeister and if there was any reality – but economics is an amazing discipline – there is so much outside the study which affects the rest.

Anyway – Just completed my move to Bird Rock in La Jolla. I am hopefully gonna stay here a while. I promised my wife that I wouldn’t discuss politics, religion, or falling house prices with the neighbors as I do not want to be shunned by those who will not follow me as the prophet returned!

Now to continue the unpacking…..

[cyphire]

Opps – sorry all – I have inflamed the religion aspect (I do admit a very strong bias – there are two worlds – the world of people who believe the dogma, and the world of people who consider it fantasy. These worlds will NEVER agree). This is a real estate blog and I will endevor to back off the anti-psalm singing as much as I can! Mea Culpa JG.

Bush is a horrific president – this has nothing to do with Religion. Conservatives do not all embrace religion – they are different topics. I am conservative in some of my beliefs, but am liberal in many. I do believe that the right wing (much of conservatives and Republicans) are ultimately based on greed – pure and simple. People vote their pocketbooks and most unfortunately many vote against their pocketbooks (without realizing it) because of disinformation, fear mongering, and carrots being held out to them. Amazing the vast number of people that vote Republican because of fear of higher taxes, changes in capital gains, more socialism, etc. when they are in the vast bracket which would benefit from them.

I don’t drive a Prius – but would support across the board legislation to clean up the environment both here and abroad. We have clean air rules here in this country – but we buy ALL our stuff from China and allow them to do what they want. Imagine if we required the Chinese to conform to strict environmental standards in order to buy each item they produce. We would have somewhat competitive marketplaces and we would from a business prospective increase business, not decrease it.

Again – FormerSanDiegan – no more religion here from me (unless attacked so everyone – don’t do it!). I’m not sure how much of the tulip story paralleled theBushMeister and if there was any reality – but economics is an amazing discipline – there is so much outside the study which affects the rest.

Anyway – Just completed my move to Bird Rock in La Jolla. I am hopefully gonna stay here a while. I promised my wife that I wouldn’t discuss politics, religion, or falling house prices with the neighbors as I do not want to be shunned by those who will not follow me as the prophet returned!

Now to continue the unpacking…..

[cyphire]

Hey Rustico, et al.

Just completed my move from the beach to Bird Rock. Hope that this neighborhood fulfills my wishes at this point. Much of the unpacking is done, but much is left to do.

2 years here and then I buy a house. Thats the plan and I’m working it!

Wow is my back tired.

[Author]

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