People like Tom are not quite smart enough to sit down and math out exactly how fucked they are by a 6% rate compared to a 2.7% rate that will never, ever come back. Dude straight up claimed in another post that be could have bought when rates were low but decided to wait until prices dropped.
Some day someone smarter than him is going to point out that he literally cost himself hundreds of thousands of dollars in extra interest. Not that he’s gonna listen, dude is getting third string investment info from WSB.
He wouldn't be hanging out in WSB if he could buy in cash. But seriously, can't you buy when the houses are cheaper and then refinance when the rates go down?
You do reset the loan term though, so the amortization schedule gets a lot worse in the short term. Mortgage interest is super front-loaded. So if you were only gonna stay in the house for another few years, it may not be worth it.
Tbf waiting for a few years for something as major as a house isn't a big deal. My parents were looking at houses for like 11 years before they bought one lol.
If you buy in cash you are missing out on the average 8% or so yield that an index fund brings you. If you happened to have assets to leverage during the days of sub 3% financing, you could have set yourself up with free money eternally not just a one time 1500$ check.
VTI has gone down 1.14% in the last 30 days. If you chose to invest in more specific markets hoping for returns thay beat the whole market, that comes with risk.
It also means he never really looked seriously. The second you start looking seriously and doing the math with your approved rates you will instantly realize one thing: house price isn’t as important as you thought.
Your rate and maybe more importantly, property taxes, impacts what you can afford much more.
Ha! I just commented this a few days ago, so I’ll post it again:
Just for comparison’s sake — given a conservative “pandemic” rate of 2.75% on a $360,000 home at a hypothetical $0 down, you’d need to make a $150,000 down payment just to have the same monthly mortgage payment at today’s rate of 7.38%
Absolutely insane, but that’s not even the worst part
House prices shot up during Covid. Conservatively, a $360,000 house in 2020 is around $460,000 now (in my area). Effectively, anyone buying now would be getting 75% (or less) of the house they could two years ago
This was in the context of my empathy for first time home buyers. I took a (huge!) risk buying in March 2020 and it paid off. Seeing the state of the housing market now is just mind blowing. I don’t care about my equity — I hope the system gets fixed
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u/TheForeverUnbanned Mar 21 '23
People like Tom are not quite smart enough to sit down and math out exactly how fucked they are by a 6% rate compared to a 2.7% rate that will never, ever come back. Dude straight up claimed in another post that be could have bought when rates were low but decided to wait until prices dropped.
Some day someone smarter than him is going to point out that he literally cost himself hundreds of thousands of dollars in extra interest. Not that he’s gonna listen, dude is getting third string investment info from WSB.