View Single Post
Kickaha
Veteran Member
 
Join Date: May 2004
 
2007-03-16, 01:49

Quote:
Originally Posted by zippy View Post
I think the "buy a little more than you can afford" has to do with the idea that a fixed rate mortgage will generally not change (taxes, etc can change it some), but your income will most likely go up - especially if you are just entering the workforce. Both when we bought our condo, and then when we bought our house, I'd say we were a little uncomfortable with the payment right out of the gate, but within a year, it was no biggie, and after a couple of years, a piece of cake.

I think people who take this mentality are trying to avoid getting two years down the road and wishing they had purchased that one house that was just a little more expensive, but so much more of what they wanted....
It depends on how you approach it. If you're going to try an eke out every bit of house you can, you're probably going to end up on a treadmill. If, however, you look at it as maximizing your investment, (ie, a 30% rise over a decade on a value of $200k nets you $60k, but the same rise on $300k nets you $90k) then the initial pain is worth it in the long run. I dunno, I try and keep as emotion free as possible in these situations. While I can say whether I like, or don't like, a house, I also can look at it rationally for future renovations, investment possibility, etc. I think if you get into the mindset of "Ooooh, but for only $50k more, I could more house!", it's hard to get out of, because there's always that next level you could jump to if you just borrow a bit more...

Quote:
I've also heard people who disagree with the mainstream view of "pay off the house as quickly as possible". Rather, they just let the appreciation of the house pay for itself, and invest the extra they would have paid. This only works if you are good at doing the investment part.
Good, and very disciplined. The danger is that the extra money saved goes towards a new TV instead of being invested wisely. If you can pull it off though, it may be worth it. If not, then don't even try it.
  quote