Also the rent (at least by me) market is insane. Some areas you can't even find a place to rent. And at a certain equilibrium price it's much better to take out a mortgage versus renting. In my particular situation it is actually cheaper in mortgage than it would be in rent for an equivalent property. And with a family if the person I'm renting from doesn't renew my lease I would have to pick everything up and move over and over. *there's no place like home* is a real thing. But again to each there own.
I would say buying a luxury car you can't afford is the worst financial decision you can make, at least properties generally appreciate in value whereas cars diminish until they are scrap.
Topic: Mortgage are most wrong financial decision you can make (Read 356 times)
It is a bit of a different situation for different people. If you do not have enough, like let's say there is a house for 300k, and you have 100k, and your income is barely enough to pay the mortgage and live, then getting a 20 year loan if you can with a good interest would allow you to actually make a great profit.
Imagine paying 200k and getting 800k loan, you would pay back something like 1.2 to 1.5 million based on your credit score, whereas you could make at least 20% profit each year with that 800k instead of paying the house full, so it is really not based on how much you have. On the other hand, if you are a famous person, who gets millions of dollars a year for sure, like you are some sports guy with 20+ million dollars a year salary at the very least, buying a house doesn't make sense, just rent a super castle type of mansion and pay like 50k per month on that, makes more sense than spending 50 million on a house.
Imagine paying 200k and getting 800k loan, you would pay back something like 1.2 to 1.5 million based on your credit score, whereas you could make at least 20% profit each year with that 800k instead of paying the house full, so it is really not based on how much you have. On the other hand, if you are a famous person, who gets millions of dollars a year for sure, like you are some sports guy with 20+ million dollars a year salary at the very least, buying a house doesn't make sense, just rent a super castle type of mansion and pay like 50k per month on that, makes more sense than spending 50 million on a house.
I wouldn't say buying is a bad decision always, but you definitely need to run the numbers, you might be better off renting in high costs of living areas.
I agree.It's not always that we can conclude that buying or mortgaging is a bad decision. You don't know someone's financial status and situation until you know them personally.
What if mortgaging is way lighter than purchasing using the whole amount. Well, some people I know does that mortgage and makes money from it despite it's not allowed to do so until they pay in full.
on acquiring something via means of this method since they are not able to pay it on full or still have some priorities but still considering on getting mortgages.yes, this could really be a heavy burden for
a specific period of time but its still a good investment since those things or properties you could still sell off if you do decide on doing such thing.
Well, as you're paying the mortgage it couldn't really be an investment at the moment because you're in debt. But once you pay it in full, you can do whatever you want with it, or basically, even you're still in the turn of paying it, you can have it rent since it's in your possession as long as there won't be any rule to be broken upon doing so.
A comfortable house to live in is an investment and they don't see that point.
that you could pay up those mortgage before making one because it would really be a big headache if you didnt able to finish it off.
This is like having a chain on your neck and once you dont able to make things right or in order then you would really suffer out the bad effects of it.
The OP should google Maslow's Hierarchy of Needs and understand it before he starts giving any more financial advice.
I wouldn't say buying is a bad decision always, but you definitely need to run the numbers, you might be better off renting in high costs of living areas.
I agree.It's not always that we can conclude that buying or mortgaging is a bad decision. You don't know someone's financial status and situation until you know them personally.
What if mortgaging is way lighter than purchasing using the whole amount. Well, some people I know does that mortgage and makes money from it despite it's not allowed to do so until they pay in full.
on acquiring something via means of this method since they are not able to pay it on full or still have some priorities but still considering on getting mortgages.yes, this could really be a heavy burden for
a specific period of time but its still a good investment since those things or properties you could still sell off if you do decide on doing such thing.
Well, as you're paying the mortgage it couldn't really be an investment at the moment because you're in debt. But once you pay it in full, you can do whatever you want with it, or basically, even you're still in the turn of paying it, you can have it rent since it's in your possession as long as there won't be any rule to be broken upon doing so.
A comfortable house to live in is an investment and they don't see that point.
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This is the dumbest financial advice you could possibly give. You're advocating for someone to essentially gamble with the money they could use to buy a house, or pay for rent (the roof over their head essentially). You do not invest with money you need to live, you invest with excess fund you have in order to grow wealth.Gambling the house payment away is a great way to end up homeless. You seem so sure you could get a 5x-10x return on any investment, are there contingency plans? Doesn't sound like it from your post. In the event you end up with a net loss, then what? You have no assets, and you ended up with less money after investment.
The whole argument of investing the money you have instead of paying a down payment is garbage and does not take into account the risk. If you pay 10% of your mortgage from the beginning you already have 10% equity, and every month that goes by, you have more equity. Having a paid off house gives you a lot of peace of mind.
Yes, exactly. Everyone needs somewhere to live. You can either pay rent each month, and end up with nothing at the end of it, or you can pay a mortgage each month, and end up with a house. Given that mortgage costs less than rent, then so long as you can afford the deposit, there's no logical reason to rent. If for some reason you want to go back to renting five years down the line, then sell the house, and you have profit from whatever you paid off.
If you want spare money to invest in crypto, then surely it's better to wait for the house price to increase slightly, then take out more money on top of your mortgage, based on the fact that your asset is now worth more than when you bought it.
I wouldn't say buying is a bad decision always, but you definitely need to run the numbers, you might be better off renting in high costs of living areas.
I agree.It's not always that we can conclude that buying or mortgaging is a bad decision. You don't know someone's financial status and situation until you know them personally.
What if mortgaging is way lighter than purchasing using the whole amount. Well, some people I know does that mortgage and makes money from it despite it's not allowed to do so until they pay in full.
on acquiring something via means of this method since they are not able to pay it on full or still have some priorities but still considering on getting mortgages.yes, this could really be a heavy burden for
a specific period of time but its still a good investment since those things or properties you could still sell off if you do decide on doing such thing.
I wouldn't say buying is a bad decision always, but you definitely need to run the numbers, you might be better off renting in high costs of living areas.
I agree.It's not always that we can conclude that buying or mortgaging is a bad decision. You don't know someone's financial status and situation until you know them personally.
What if mortgaging is way lighter than purchasing using the whole amount. Well, some people I know does that mortgage and makes money from it despite it's not allowed to do so until they pay in full.
You can run numbers all you want but there is intrinsic value in holding a mortgage. If you don't have enough money on hand to buy a house and have a family, there is value in putting your family in a permanent home that you can do what you want there. That's why most people choose to get a mortgage, not just based on numbers.
I was also having the same thought right now, but then everyone can have their own opinion on things like this. I wouldn’t say that the both of you are right nor wrong, it all depends on the way you view it. Before taking a mortgage, one should look at the advantages of taking a mortgage and the disadvantages. If after you have weighed all these and you feel that it would be right for you to go ahead and start taking a mortgage, then it’s alright.But, if you feel it is not for you, then you can go with an option that is totally different. Mortgage seems like an affordable way to own a home, and it is also a cost-effective way of borrowing, but then you will have to watch out for the fees that comes with it. And then as for investing in Bitcoin, you should know there are risks involved as well, and stock market wouldn’t fetch as much profit as the cryptocurrency market.
You can run numbers all you want but there is intrinsic value in holding a mortgage. If you don't have enough money on hand to buy a house and have a family, there is value in putting your family in a permanent home that you can do what you want there. That's why most people choose to get a mortgage, not just based on numbers.
You have a very simple and straightforward statement on this and I do agree with you. Not many people have the capability also to turn their money into something profitable before they purchase their home. Many are resorting to this option, because they want at least a lil bit of security for their family. Even if they are paying monthly mortgage, the feeling of security to have a home to go to is priceless. You can't equate that with the proposed numbers because don't expect that people can always make their initial investments into high profitable ones.
Lets do the little calculation why
You buy house or apartment with total 300,000$
You have to put down payment of 15-30k ...wich is all ready bad.
With this 15-30k you can make more money in 1-2 years by investing it on gold stock IPO usually 5x-10x return of good ipo if u buy before listing.
With crypto u can make easy one year 100k of this if you divide this money small percentages. And buying dips of btc and some othet good coins.
But if you put money down on mortgage that big and it takes 20-30 years to pay back mortgage well the chnages are u never going to pay off this also you put your capital wich has a lot good ways to use just giving away your hard earned money.
Mortgage without high rate and without downpayment even not smart but with downpayment no right in their mind will never do that.
You better rent if you can afford downpayment the money u r willing to put down for the downpayment u can live one year in decent apartment and you have money free to use.
Second thing is it smart to buy property ?
Only smart is you want to let and making profit out of it.
But to be smart with money you can buy items only wich not exeeds your 2% then you stay in preospeurs state in your life.
How do i know its time to buy or sell ?
Its so simple if dollar strong.....you sell dollar.
And buy back weaker dollar to get cheaper dollars.
If inflation hitting hard its a top on markets so no goestions about it you sell everything if inflation going lower you buy everything.
Do not worry about something you sold at the ATH and it keep going higher after this its a " overbought" the fools trick. The price will come down sooner or later make sure u sell at green all gold real estate stocks and crypto.
As we see so many easy opportunities to use money smart to but it down on mortgage payment its a clearly wrong doing with ur finances and waste of money.
If you put down payment on mortgage its money you just trhow away and never gona see it.
You buy house or apartment with total 300,000$
You have to put down payment of 15-30k ...wich is all ready bad.
With this 15-30k you can make more money in 1-2 years by investing it on gold stock IPO usually 5x-10x return of good ipo if u buy before listing.
With crypto u can make easy one year 100k of this if you divide this money small percentages. And buying dips of btc and some othet good coins.
But if you put money down on mortgage that big and it takes 20-30 years to pay back mortgage well the chnages are u never going to pay off this also you put your capital wich has a lot good ways to use just giving away your hard earned money.
Mortgage without high rate and without downpayment even not smart but with downpayment no right in their mind will never do that.
You better rent if you can afford downpayment the money u r willing to put down for the downpayment u can live one year in decent apartment and you have money free to use.
Second thing is it smart to buy property ?
Only smart is you want to let and making profit out of it.
But to be smart with money you can buy items only wich not exeeds your 2% then you stay in preospeurs state in your life.
How do i know its time to buy or sell ?
Its so simple if dollar strong.....you sell dollar.
And buy back weaker dollar to get cheaper dollars.
If inflation hitting hard its a top on markets so no goestions about it you sell everything if inflation going lower you buy everything.
Do not worry about something you sold at the ATH and it keep going higher after this its a " overbought" the fools trick. The price will come down sooner or later make sure u sell at green all gold real estate stocks and crypto.
As we see so many easy opportunities to use money smart to but it down on mortgage payment its a clearly wrong doing with ur finances and waste of money.
If you put down payment on mortgage its money you just trhow away and never gona see it.
You can run numbers all you want but there is intrinsic value in holding a mortgage. If you don't have enough money on hand to buy a house and have a family, there is value in putting your family in a permanent home that you can do what you want there. That's why most people choose to get a mortgage, not just based on numbers.
Those numbers seem extremely low for high cost of living places around the world, like Oslo, San Francisco, Sydney, New York, Toronto, etc.
Over there you're looking at buying a nice one or two bedroom apartment for more than 1 million dollars, usually the loan would require around 10-20% at a minimum, and that's 100-200k that goes to the deposit.
It's crazy out there in some cities.
I wouldn't say buying is a bad decision always, but you definitely need to run the numbers, you might be better off renting in high costs of living areas.
Over there you're looking at buying a nice one or two bedroom apartment for more than 1 million dollars, usually the loan would require around 10-20% at a minimum, and that's 100-200k that goes to the deposit.
It's crazy out there in some cities.
I wouldn't say buying is a bad decision always, but you definitely need to run the numbers, you might be better off renting in high costs of living areas.
Only people who don't understand mortgages pose risks and dangers to them, unless they fully understand the downsides of getting a mortgage. Low interest rates compared to other loans, flexible interest payment/terms. Long ago I was not interested in bank loans but my loans from the bitcoin based ecosystem - Sovryn is where I put my loans.
You would really be hooked up if you do let yourself get interested on those kind of offers but its not bad on at least engaging with loans or mortgages as long you are really that responsible on paying those and you should be aware on how interest and increases would really be a burden for a period of time. So be wise and be sure that you could really pay it up on the terms you had set out.
It is true that you would really be making things become a big problem if you do just make out decisions without those reconsiderations.
Circumstances vary from one country to another. In my country, however, the great majority of the people cannot buy a decent house without getting into mortgage. Borrowing is the only way for them to be able to own as expensive a property as a house. A house may be a basic need for a family, but owning one is very difficult.
If one is to only to rely on savings, salary, income from small businesses, and so on, it would take decades and decades before a house is built. So, many would find it practical to take a mortgage and pay monthly for 2-3 decades in relatively small amounts.
If one is to only to rely on savings, salary, income from small businesses, and so on, it would take decades and decades before a house is built. So, many would find it practical to take a mortgage and pay monthly for 2-3 decades in relatively small amounts.
Our mortgage was popular in about 2005-2010. But as always, not everyone understood the risks, someone took a mortgage in foreign currency instead of local, and the next inflation "proved" their illogicality. Many banks did not behave very correctly, forming very tricky mortgage agreements, where it was difficult to form the real amount of overpayment ...
The situation changed a lot when developers (this really refers to apartment developers) began to give payment by installments for 3-5-10 years with very attractive conditions - for example, 1-1.75% per annum of the balance (there is an initial, not very large contribution ). This is a much more convenient home buying model.
Only people who don't understand mortgages pose risks and dangers to them, unless they fully understand the downsides of getting a mortgage. Low interest rates compared to other loans, flexible interest payment/terms. Long ago I was not interested in bank loans but my loans from the bitcoin based ecosystem - Sovryn is where I put my loans.
Circumstances vary from one country to another. In my country, however, the great majority of the people cannot buy a decent house without getting into mortgage. Borrowing is the only way for them to be able to own as expensive a property as a house. A house may be a basic need for a family, but owning one is very difficult.
If one is to only to rely on savings, salary, income from small businesses, and so on, it would take decades and decades before a house is built. So, many would find it practical to take a mortgage and pay monthly for 2-3 decades in relatively small amounts.
If one is to only to rely on savings, salary, income from small businesses, and so on, it would take decades and decades before a house is built. So, many would find it practical to take a mortgage and pay monthly for 2-3 decades in relatively small amounts.
Lets do the little calculation why
You buy house or apartment with total 300,000$
You have to put down payment of 15-30k ...wich is all ready bad.
With this 15-30k you can make more money in 1-2 years by investing it on gold stock IPO usually 5x-10x return of good ipo if u buy before listing.
With crypto u can make easy one year 100k of this if you divide this money small percentages. And buying dips of btc and some othet good coins.
You buy house or apartment with total 300,000$
You have to put down payment of 15-30k ...wich is all ready bad.
With this 15-30k you can make more money in 1-2 years by investing it on gold stock IPO usually 5x-10x return of good ipo if u buy before listing.
With crypto u can make easy one year 100k of this if you divide this money small percentages. And buying dips of btc and some othet good coins.
You seem quite naive and suffer extreme tunnel vision when it comes to cryptocurrency. Property has been an incredible investment for hundreds of millions of people around the world, not only that - it gives them a place to live. People are putting a downpayment of 10% of the value, borrowing at 1% in some cases and the value of the asset is increasing by up to 10% per year - that is an incredible investment that is extremely safe compared to any sort of stock market investing with comparable returns. You pick random figures out of the air like making 5x-10x in a couple years is easy - if it was so easy then money would quickly be devalued and everyone would be doing it. It's not possible to make such returns without extreme risk that many people cannot afford.
If u buy then yes but not good to take it with mortgage.
You're saying it's easy to make a 10x profit with cryptos within a year, but if it were so easy, more people would have done it. Plain hodling won't bring such profits, and if one's doing some trading, it is very easy to lose money as well. Not to mention that cryptos are in a gray area in many countries, and while you can use them and sell for fiat in small amounts, getting hold of enough money to buy accommodation for cryptos might be very difficult. Also, you're saying it's okay to buy a house but not with mortgage. Well, what if you don't have a place of yours and are renting? You're spending a lot of money on rent every month, and even if you're renting at a pretty good price, in about 10 years of rent you would have most certainly spent the amount required to buy a flat (or see Kakmakr's calculation for a longer time period), and yet you'd still own nothing and keep renting, spending more and more money every year. So if you can't afford to buy a house because you have to spend money on renting, mortgage might be the only reasonable way to go, unfortunately. Even with high interest rates.
Anyway, when you really need a house, as long as the monthly instalment doesn't make you more suffer, it's a good decision IMO.
Some people have achieved to own a house by the means of mortgage and no matter how painful or stressful it was for them at the end of the month was inconsequential. I believe this too that we don't need to consider the inconvenience which will be temporary and at the end we are happy owing the house. Suffering is not permanent, hard times don't last forever.
Ok, so whilst you are investing that money into Crypto that you are not paying on a mortage.. where are you staying? Well, you are staying in a "rental" house of someone else that are making money out of you. 
Let's make a quick calculation of that (without a yearly increase in rent) :
First 10 years you are Single.... so you rent a 1 bedroom apartment for say $1000 pm x 12 x 10 = $120 000
Then you get married and you have kids within 5 years ..so you rent something bigger for say $2000 pm x 12 x 10 = $240 000
After 10 years your children grow up.. you need a more "entertainment" oriented house with a pool = $3000 pm x 12 x 10 = $360 000
Total after 30 years spend on rent = $720 000 !!! (Worst of all... you have NO property/Asset to show for it)
Let's make a quick calculation of that (without a yearly increase in rent) :
First 10 years you are Single.... so you rent a 1 bedroom apartment for say $1000 pm x 12 x 10 = $120 000
Then you get married and you have kids within 5 years ..so you rent something bigger for say $2000 pm x 12 x 10 = $240 000
After 10 years your children grow up.. you need a more "entertainment" oriented house with a pool = $3000 pm x 12 x 10 = $360 000
Total after 30 years spend on rent = $720 000 !!! (Worst of all... you have NO property/Asset to show for it)
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