quote:
Maradon! startled the peaceful upland Gorillas, blurting:
There's no doubting that there are huge benefits, but speaking strictly in terms of expendatures versus equity, in many areas you can come out ahead by renting. I had a calculus professor who figured this sort of thing out for fun.
You can never come out ahead by renting. There is zero possibility of ever having equity if you rent, whereas even if your monthly interest payment is more than your rent would be you still have equity. Your calculus professor, in short, hadn't the faintest clue what he was talking about.
The only scenario where such a thing is even remotely possible is in a mortgage that allows negative amortization. . .which isn't legal everywhere and, frankly, anyone who gets into such a contract deserves the consequences.
A home is a very good investment over time.
--Satan, quoted by John Milton
Under capitalism, man exploits man. Under communism, it's just the opposite. - John Kenneth Galbraith
quote:
Karnaj was naked while typing this:
I want a house, partially because I hate wasting money on rent, and partially because I want to install a beer tap on the kitchen sink.
This is so going to be my next fridge.
Tarquinn fucked around with this message on 02-07-2007 at 11:21 AM.
Also, houses in Germany cost a fortune. 
quote:
Bloodsage - Bloodsage = 0:
You can never come out ahead by renting. There is zero possibility of ever having equity if you rent, whereas even if your monthly interest payment is more than your rent would be you still have equity. Your calculus professor, in short, hadn't the faintest clue what he was talking about.The only scenario where such a thing is even remotely possible is in a mortgage that allows negative amortization. . .which isn't legal everywhere and, frankly, anyone who gets into such a contract deserves the consequences.
A home is a very good investment over time.
There are a few situations where it makes more sense to rent.
1) You have no money at all what-so-ever for a down payment. This means you've got to pay PMI, the first 2-3 years of your mortgage is going to go 99% towards interest and 1% towards principal, and you've got property taxes and house repairs to worry about. $800 in rent and $200 towards savings vs $900 towards mortgage, $100 towards PMI/Taxes- you'd be in a better place renting. However, if you're planning on living in a place for 10-15 years, it wouldn't be unacceptable.
2) You're only going to be able to afford a place via an interest only loan and the housing market is deflating. Your house is not appreciating in value and you're not paying off the principal. You'll have to pay money to sell it, so to speak.
I'm sure there are other situations to consider. But generally speaking, Bloodsage is right. If you've got a traditional loan, a decent down payment, and plan on living there for over 3 years, it always makes more sense to buy.
Under capitalism, man exploits man. Under communism, it's just the opposite. - John Kenneth Galbraith
quote:
Verily, the chocolate bunny rabbits doth run and play while Blindy. gently hums:
There are a few situations where it makes more sense to rent.1) You have no money at all what-so-ever for a down payment. This means you've got to pay PMI, the first 2-3 years of your mortgage is going to go 99% towards interest and 1% towards principal, and you've got property taxes and house repairs to worry about. $800 in rent and $200 towards savings vs $900 towards mortgage, $100 towards PMI/Taxes- you'd be in a better place renting. However, if you're planning on living in a place for 10-15 years, it wouldn't be unacceptable.
2) You're only going to be able to afford a place via an interest only loan and the housing market is deflating. Your house is not appreciating in value and you're not paying off the principal. You'll have to pay money to sell it, so to speak.
I'm sure there are other situations to consider. But generally speaking, Bloodsage is right. If you've got a traditional loan, a decent down payment, and plan on living there for over 3 years, it always makes more sense to buy.
I didn't say there was no situation where it makes more sense to rent. Maradon claimed, however, that one can come out ahead "in terms of expenditures versus equity" by renting. Unless one is in a situation of negative amortization, expenditures versus equity will always be in favor of buying for the simple reason that equity is always zero when renting.
--Satan, quoted by John Milton
