Considering salary differences, mortgage debt, appreciation potential. I guess I wonder how paying crazy interest on mortgage debt could be healthy for long term savings? Versus the fact that many years from now, my salary should outpace my mortgage payment and allow for additional savings.
2007-01-31 01:02:19 · 13 answers · asked by jck_kerouac 2 in Business & Finance ➔ Personal Finance
First, Jack Kerouac does not think about mortgages. He lives hand to mouth, jumping from train to train, Mad Dog 20/20 in hand.
The simple answer to your question is appreciation. When people buy a home, they earn on appreciation, not by paying down the mortgage.
Now, as such, the best areas to have a mortgage are places where there is the most potential for appreciation. That's where the people want to live, where the employers want to be, closer to the center of the city is better.
That's my advice to you if you want to build up wealth on the place you live. People have other priorities that come into play when choosing which house to buy, so you have to balance your interests.
Jack Kerouac would probably require a healthy wet bar, and a big bohemian room for his eccentric friends to cavort in, bongo drums and all.
2007-01-31 01:20:10 · answer #1 · answered by Murphy 3 · 0⤊ 0⤋
You are exactly right about your salary. However, where you live should be determined by your lifestyle. Do you have children? You want good schools. If you are single, you want a place with lots of activities, nightlife, etc. A place where you can meet other singles with like interests. If you work hard, you can pay that mortgage off in much less than 30 years. You can shave 5 years off just by making 1 extra payment per year. When I paid mine off, I made the check out for at least $100. more per month than the actual payment. I put every extra dime into that mortgage and paid off a 15 year loan in 11 years! If you do pay extra, write across the top of the check "apply extra to Principle". In a very short time you will see your interest payments go down. Also, make your January payment before the end of December and charge that extra interest off your taxes.
2007-01-31 01:20:48 · answer #2 · answered by p h 6 · 0⤊ 0⤋
Savings is one thing, investment is another. Any home is an investment - so no matter where you buy, your money is growing anyway. It is very uncommon for real estate to lose value over a period like 30 years.
Secondly, I don't believe in living your youth just for your retirement. Enjoy your life now... you might not live until you retire. (not to be morbid or anything).
Even pension schemes will all change. The age of retirement will change by the time your turn comes. It's a long way off. Ask your parents or grandparents what it was like for them at your age, they will tell you a completely different story to what they ended up with.
Good luck!
2007-01-31 01:18:23 · answer #3 · answered by quay_grl 5 · 0⤊ 0⤋
It's a great setup if you live in the expensive city while you are working, and then move to the cheap city when you retire.
The expensive city gives you more pay, which of course goes to a bigger mortgage. But the house compounds based on a larger initial price. Then you can move to the cheap city and retire earlier.
2007-01-31 03:01:26 · answer #4 · answered by Quixotic 3 · 0⤊ 0⤋
I recommend living cheap in an expensive city. Make as much as you can, max out your IRA, 401 or other retirement plan every year, and if you can buy a home the interest is deductible. Because a city may be an expensive one to live in that does not mean you have to live in it. The suburb offer great transportation and affordable housing.
2007-01-31 01:17:37 · answer #5 · answered by tman 5 · 0⤊ 0⤋
New Jersey isn't much less costly to stay in, in spite of the undeniable fact that it's not the utmost the two. Housing value is maximum with the shortest holiday(except you do no longer ideas lesser areas). there are just some cities/cities that i could advise you reside removed from. For the main area New Jersey would not have a severe crime fee. NJ Transit's practice & bus provider can get you into the city from maximum areas of the state quite straight forward. Commutes could selection from ninety-15 minutes counting on area. you're clever to no longer want to rigidity into the NYC, the conventional Hudson River crossings are undesirable on stable days. once you're working in the city, you're able to be making good money. seem into Bergen, or Union county for semi-low-value housing. a minimum of the electrical powered energy is greater reliable in Jersey.
2016-11-23 17:11:11 · answer #6 · answered by ? 4 · 0⤊ 0⤋
The only way crazy interest on a mortgage debt helps you is if you are able to deduct it from your taxes therefore enabling you to save money that way.
2007-01-31 01:15:54 · answer #7 · answered by Michelle 4 · 0⤊ 0⤋
Personally I can't wait for my one room cabin.
When my husband and I retire we are looking forward to minimizing. We have always had a big house filled with five kids, and can't wait for all of them to move out so we can sell the house and move to a mountainous state and buy a small cabin to hibernate in.
I think you should do and go where ever it is that you want to spend your best years.
If the city is appealing to you then by all means go for it.
2007-01-31 01:22:38 · answer #8 · answered by littlemomma 4 · 0⤊ 0⤋
the answer is simple even if you earn 10000 dollars a week if you spend 110000dollars then you are a loser by 1000 dollars but u spend only 8000 dollars then you are rich by 2000 dollars and thats the equation. Hope you understood the equation . All the best.
2007-01-31 01:20:06 · answer #9 · answered by ssmindia 6 · 0⤊ 0⤋
Don't bet your life on that.
If you want to save for the future then buy a house that you can afford and never sell.
Just let it out for leace if you ever have to move and use the equity to buy your next home.
2007-01-31 01:16:30 · answer #10 · answered by Anonymous · 0⤊ 0⤋