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If you believe that inflation or deflation is coming......

 
MaxMad
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User ID: 13864401
United States
01/22/2013 11:25 AM

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If you believe that inflation or deflation is coming......
Wouldn't it make sense to get a fixed rate mortgage? My example is I am paying $1500 in rent for a 2 bdr twnhome-that is nuts... I can save $600/month in housing by buying a house.. plus its a fixed rate-my landlord can't raise my rent every year...What am I missing?
Anonymous Coward
User ID: 17851333
United States
01/22/2013 11:33 AM
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Re: If you believe that inflation or deflation is coming......
Wouldn't it make sense to get a fixed rate mortgage? My example is I am paying $1500 in rent for a 2 bdr twnhome-that is nuts... I can save $600/month in housing by buying a house.. plus its a fixed rate-my landlord can't raise my rent every year...What am I missing?
 Quoting: MaxMad


I don't think you are missing anything. No one knows what is going to happen for sure. But owning, for me, is much better. I hate renting where I can't do what I want inside or outside with the house and I don't like someone raising my rent every time the lease runs out. And I don't like being told I can't have my pets or having someone snooping around the house from time to time.

Take the plunge with that fixed rate.
Anonymous Coward
User ID: 17851333
United States
01/22/2013 11:34 AM
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Re: If you believe that inflation or deflation is coming......
Do not buy a house with a Homeowner's Association! You've lost all your freedom of home ownership when you do that.
MaxMad (OP)

User ID: 13864401
United States
01/22/2013 11:35 AM

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Re: If you believe that inflation or deflation is coming......
Wouldn't it make sense to get a fixed rate mortgage? My example is I am paying $1500 in rent for a 2 bdr twnhome-that is nuts... I can save $600/month in housing by buying a house.. plus its a fixed rate-my landlord can't raise my rent every year...What am I missing?
 Quoting: MaxMad


I don't think you are missing anything. No one knows what is going to happen for sure. But owning, for me, is much better. I hate renting where I can't do what I want inside or outside with the house and I don't like someone raising my rent every time the lease runs out. And I don't like being told I can't have my pets or having someone snooping around the house from time to time.

Take the plunge with that fixed rate.
 Quoting: Anonymous Coward 17851333


The obvious risk is that prices continue to fall (we are down about 50% from the height in 2006)... But since 2006 rental rates have increased 38%!!!! I am shocked by that!!
MaxMad (OP)

User ID: 13864401
United States
01/22/2013 11:36 AM

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Re: If you believe that inflation or deflation is coming......
Do not buy a house with a Homeowner's Association! You've lost all your freedom of home ownership when you do that.
 Quoting: Anonymous Coward 17851333


I would never do that! Thanks for the advice! People dont realize how much control the HOA has over their place. Here in Commieland (IL) the HOA can actually foreclose if you fall behind!
Mindmolder23

User ID: 29844637
Thailand
01/22/2013 11:41 AM
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Re: If you believe that inflation or deflation is coming......
I don't think anyone actually owns their home. Because if they lose their job and cannot pay property taxes etc it can get seized. Its better to buy land first.
MaxMad (OP)

User ID: 13864401
United States
01/22/2013 11:48 AM

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Re: If you believe that inflation or deflation is coming......
I don't think anyone actually owns their home. Because if they lose their job and cannot pay property taxes etc it can get seized. Its better to buy land first.
 Quoting: Mindmolder23


Land can be seized the same way...Just sayin...
Anonymous Coward
User ID: 24626366
United States
01/22/2013 11:52 AM
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Re: If you believe that inflation or deflation is coming......
Wouldn't it make sense to get a fixed rate mortgage? My example is I am paying $1500 in rent for a 2 bdr twnhome-that is nuts... I can save $600/month in housing by buying a house.. plus its a fixed rate-my landlord can't raise my rent every year...What am I missing?
 Quoting: MaxMad


Maintenance, insurance, etc. If deflation hits you lost value.... when you sell. If inflation hits you sell and have to spend more to replace. If hyperinflation hits and your wages soar to $1000000 a month.... then paying off fixed rate is easy.Interest rates are a low as ever. Houses relatively cheap. Could be good investment... but buy if you want to stay in it. Anything else is a bonus.
Anonymous Coward
User ID: 19980561
United States
01/22/2013 11:54 AM
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Re: If you believe that inflation or deflation is coming......
Do not buy a house with a Homeowner's Association! You've lost all your freedom of home ownership when you do that.
 Quoting: Anonymous Coward 17851333



:Agreed:
Pay attention to this (OP) It's no different then living in an apartment. You don't have the freedom to do what you want with the place. Heed this warning well...
RAe
User ID: 32711747
United States
01/22/2013 11:55 AM
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Re: If you believe that inflation or deflation is coming......
Taxes, insurance costs never ever go down. Maintenance costs are a real bitch. Plus, lets say you do pay that thing on in 30 yr, it might only be worth half of what you borrowed for it.


Damned if do, damned if you don't. House always wins (government)
Anonymous Coward
User ID: 961432
United States
01/22/2013 12:04 PM
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Re: If you believe that inflation or deflation is coming......
A house is a roof over your head, it is also a naturally depreciating asset. A house requires continual maintenance, it gets old simply like a car. You don't buy a car as an investment unless it is an old classic like a 60's vette and then to recoup your investment you need to find a buyer interested in that particular car.

If you need/want a house in a particular neighborhood then realize it is going to depreciate in value over time. Even if the price apparently goes up, in terms of inflation adjusted value it will depreciate.

The only reason housing prices continually appreciated for a couple decades was pure debasement of our currency and inflation of our financial sector.

.
MaxMad (OP)

User ID: 13864401
United States
01/22/2013 12:18 PM

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Re: If you believe that inflation or deflation is coming......
Taxes, insurance costs never ever go down. Maintenance costs are a real bitch. Plus, lets say you do pay that thing on in 30 yr, it might only be worth half of what you borrowed for it.


Damned if do, damned if you don't. House always wins (government)
 Quoting: RAe 32711747


Dollar most definetly will be worth half, which is exactly why I would want to lock in now...
Anonymous Coward
User ID: 32623728
Argentina
01/22/2013 12:29 PM
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Re: If you believe that inflation or deflation is coming......
A house is a roof over your head, it is also a naturally depreciating asset. A house requires continual maintenance, it gets old simply like a car. You don't buy a car as an investment unless it is an old classic like a 60's vette and then to recoup your investment you need to find a buyer interested in that particular car.

If you need/want a house in a particular neighborhood then realize it is going to depreciate in value over time. Even if the price apparently goes up, in terms of inflation adjusted value it will depreciate.

The only reason housing prices continually appreciated for a couple decades was pure debasement of our currency and inflation of our financial sector.

.
 Quoting: Anonymous Coward 961432


This guy gets it. If you buy a house thinking you're going to make money on the purchase, that a house is an investment, you are sadly mistaken. Anyone who believes that is merely a speculator, and is speculating on potential future price appreciation. But almost no one actually KNOWS how to be a speculator (it takes years of intensive study). You have to know when to buy a house and when to sell it, because, as another poster correctly said, YOU DON'T OWN YOUR HOME. If you think you own it, try not paying your property taxes for a few years and you'll find out who REALLY owns your home.

There are times when buying a house is a good speculation and times when it isn't. Buying a house today in the U.S. is a TERRIBLE speculation. There ARE some places in the world where real estate is a good investment right now, but there aren't many and they're mostly in places the average person would be too much of a chickenshit to buy.
Anonymous Coward
User ID: 12064276
United States
01/22/2013 12:49 PM
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Re: If you believe that inflation or deflation is coming......
if you enjoy being slave to banks ( 15 to 30 year ) and lose the freedom to move about when necessary then buying is the better choice....