Renting vs Buying: Weighing the pros and cons

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I owe under $50k on my house (owned it 2 years now), my mortgage interest is $1500 a year. There isn't much interest deduction for me.
 
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Buying a larger home than I need so I can spend more on interest so the government can refund 20% of that expense.....not exactly a "get rich quick scheme". As I said, the mortgage interest deduction is over rated unless you are in a million dollar dump in Silicon Valley.
 
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Originally Posted by philipp10
Buying a larger home than I need so I can spend more on interest so the government can refund 20% of that expense.....not exactly a "get rich quick scheme". As I said, the mortgage interest deduction is over rated unless you are in a million dollar dump in Silicon Valley.
It probably works if you have a 300-400k mortgage, otherwise if it's less than that, it may not be worth it. And you have to be in a specific range too as it's also capped.
 
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Originally Posted by Wolf359
Originally Posted by philipp10
Buying a larger home than I need so I can spend more on interest so the government can refund 20% of that expense.....not exactly a "get rich quick scheme". As I said, the mortgage interest deduction is over rated unless you are in a million dollar dump in Silicon Valley.
It probably works if you have a 300-400k mortgage, otherwise if it's less than that, it may not be worth it. And you have to be in a specific range too as it's also capped.
Of course you don't see your realtor telling you this. They just mindlessly repeat the claim that your home is a great tax saver. The devils in the details and unless you do your homework, you're just parroting your realtors false claims.....
 
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Originally Posted by philipp10
Originally Posted by Wolf359
Originally Posted by philipp10
Buying a larger home than I need so I can spend more on interest so the government can refund 20% of that expense.....not exactly a "get rich quick scheme". As I said, the mortgage interest deduction is over rated unless you are in a million dollar dump in Silicon Valley.
It probably works if you have a 300-400k mortgage, otherwise if it's less than that, it may not be worth it. And you have to be in a specific range too as it's also capped.
Of course you don't see your realtor telling you this. They just mindlessly repeat the claim that your home is a great tax saver. The devils in the details and unless you do your homework, you're just parroting your realtors false claims.....
I'm a realtor.
 
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Originally Posted by Wolf359
Originally Posted by philipp10
Originally Posted by Wolf359
Originally Posted by philipp10
Buying a larger home than I need so I can spend more on interest so the government can refund 20% of that expense.....not exactly a "get rich quick scheme". As I said, the mortgage interest deduction is over rated unless you are in a million dollar dump in Silicon Valley.
It probably works if you have a 300-400k mortgage, otherwise if it's less than that, it may not be worth it. And you have to be in a specific range too as it's also capped.
Of course you don't see your realtor telling you this. They just mindlessly repeat the claim that your home is a great tax saver. The devils in the details and unless you do your homework, you're just parroting your realtors false claims.....
I'm a realtor.
and an honest one, thank you
 
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I'll sum it up in 2 sentences (owning 2 myself and parents are landlord of many): Pro: You are borrowing other people's money against housing cost inflation, and you are trading uncertain cost (rent rising) vs certain (assuming fixed mortgage), and you can do whatever you want to it (remodeling, gardening, etc). Con: It is pain in the butt, now everything that happens is on YOU to fix or pay money to fix. You cannot easily walk away if you want to move. If the neighborhood goes down the drain your share of the asset (market value - the remaining mortgage) goes down with it. I think buying a home when you are ready to settle and has the ability to is a good choice, but not when you are stretching for every penny and borrowing with high cost loans that cannot afford value to go down for an extended time.
 
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Originally Posted by philipp10
Buying a larger home than I need so I can spend more on interest so the government can refund 20% of that expense.....not exactly a "get rich quick scheme". As I said, the mortgage interest deduction is over rated unless you are in a million dollar dump in Silicon Valley.
That's not how it works. People "trade up" because they make more money or they are willing to pay more for the location (school, commute) when they want (have school age kids). Some people have a longer term vision so they buy ahead of their need, like people buying 3 row SUVs with AWD when they only have a family of 3, and go skiing once a year in a place that never snows.
 

RDY4WAR

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We are making sure our mortgage, including homeowners insurance and property taxes, do not exceed 30% of our income. That gives us a window up to ~$1,410 per month. Around here, that can buy a pretty decent house.
 
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