I'm not a fan of debt, but my wife is eager to buy a house. Currently, we rent a spacious house for $5K (valued at $1.7M). If we buy a similar house, I'd have to shell out over $10K monthly, plus $3K in property tax and maintenance fees. We both are employed in tech and our investments yield a solid 6%, and I dread the stress of debt-related job insecurity. However, my wife attaches a lot of emotional value to owning a home, especially since our landlord's recent decision to sell the house has intensified her resolve. What's the best course of action here? NW: 700K (no debt) HH TC: 600K
Are you in LA, OC, or SD?
I think the question isn't "do I buy a house or not" it's "how do I appease my wife." Would she appreciate a holiday home you only used on weekends? Any other way to provide that sense of security offered by home ownership without making a bad investment?
Why would a holiday home be better? Wife wants stability. A holiday home brings all the headaches of home ownership without any sense of security and they still have to pay rent.
I've got an urge to own a home. A vacation property would work for me. It's just a psychological thing... a permanent property you never have to move. Sometimes you have things like family photos and decorations and inherited things that don't feel good to cart around every year. When you hang them up in a place you own, and you spend time in that place, it scratches an itch. It gives an anchor. Your actual rental can feel more like a furnished hotel you use to grind out a job. If you're hybrid, you might even spend more time at the vacation property than your rental. It might even allow downsizing the rental.
You could meet in the middle and find something which is 7-8k per month mortgage. What about your debt to your wife. Don’t you owe it to her to satisfy her desires!
You'll be writing off the mortgage payments on your taxes for a big tax break. Is it just a case where you're nervous of being committed to those payments in an uncertain future environment?
Anyone who tells you that you get a tax break from taking a mortgage is either a fool or a liar.
Max up to 750k of mortgage value only.
Your wife is economically illiterate.
Not really. People who say this without actually doing the math are economically illiterate. They can easily afford it with their TC. Question is really how much they value owning a home and all the headaches it brings.
At 600k you are willing to take on a 13k mortgage? Damn stupid if you think about it
Not really. At 600k TC, they can easily afford a 13k monthly payment. The question is whether they want to do it.
As someone said, rent is the maximum amount you will have to pay, mortgage is the minimum amount you will have to pay. With 600TC, I would probably recommend buying something in the range of 800k -1mil. Not a cent more. With current mortgage rates, you are looking at 6-7.5% rates. With the current market, what if one of you gets laid off tomorrow. Will you be able to keep up the mortgage payments? That's what you should be thinking.
800k house would be shit compared to their current
Smart man right here. Love the handle Kaiser.
It's stupid to buy a house with the current interest rates...unless of course you're a cash buyer, or allergic to money.
Home value only goes up. Just ask people from last decade. Your 1.7M house will be worth 3M in 10 years. Don’t listen to the haters and losers. They will be renting forever and will have to leave California for some red state that doesn’t have sunshine and where the best restaurant in town is a Denny’s. Buy now or be forever priced out.
How are you gonna convince your wife?
I am finding it hard 😔