I’m sorry, but I cannot agree with many of your points. “…if you can buy a $400,000 home then you probably should buy that instead of a $300,000 home.” That’s exactly the kind of irresponsible advice that got millions of borrowers in over their head in 2007/2008…especially with the kind of inflated prices we are seeing right now.
And if you can’t make the payments you can rent or get roommates…that is far from a realistic solution for the majority. Can a family with a couple of kids just pick up, move out and rent the house easily? Change school districts? Wouldn’t they have to pay rent somewhere, too? And bringing in roommates would work for some people, but not most.
Your numbers on how putting $5,000 down on a $100,000 and if it goes up you’ve make 100% return on your money is just not correct. In order for you to have made a 100% return on your money, you would need to actually make $10,000; your original $5,000 would be your principal…making your principal back is not return. In that specific case, you would have theoretically made your $5,000 back, but only if you were to actually sell the house, which has a cost, of course. A house is not a liquid investment that generates cash that is easily removed. Everything has a cost.
I’m an experienced Financial Advisor and CFP, and I’m sorry, but your advice is poor. I am not attacking you personally, but I think maybe some more research should be done before posting things like this that people could use a basis for making a very large and expensive decision.
Inspiring me to finally get off my ass and buy a house! Thank you!
Excellent write-up, Steve!
I’m sorry, but I cannot agree with many of your points. “…if you can buy a $400,000 home then you probably should buy that instead of a $300,000 home.” That’s exactly the kind of irresponsible advice that got millions of borrowers in over their head in 2007/2008…especially with the kind of inflated prices we are seeing right now.
And if you can’t make the payments you can rent or get roommates…that is far from a realistic solution for the majority. Can a family with a couple of kids just pick up, move out and rent the house easily? Change school districts? Wouldn’t they have to pay rent somewhere, too? And bringing in roommates would work for some people, but not most.
Your numbers on how putting $5,000 down on a $100,000 and if it goes up you’ve make 100% return on your money is just not correct. In order for you to have made a 100% return on your money, you would need to actually make $10,000; your original $5,000 would be your principal…making your principal back is not return. In that specific case, you would have theoretically made your $5,000 back, but only if you were to actually sell the house, which has a cost, of course. A house is not a liquid investment that generates cash that is easily removed. Everything has a cost.
I’m an experienced Financial Advisor and CFP, and I’m sorry, but your advice is poor. I am not attacking you personally, but I think maybe some more research should be done before posting things like this that people could use a basis for making a very large and expensive decision.
Sound advice. But not as fun as the trifecta at Sportsman's!
First time it is a real financial advice. But I miss the old meandering off topic essay that makes me smile.