Author Topic: First house for a young man  (Read 32522 times)

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Offline gildasd

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Re: First house for a young man
« Reply #25 on: July 03, 2017, 08:45:09 pm »
Don't get house poor.
Never spend everything without leaving a buffer, because shit will happen (just had the bathroom hotwater go kaboom)
If you have to get a mortgage, you should put 20% down, otherwise you will have to pay PMI on top of your monthly mortgage payment.
As for how much, go to a credit union that still has a real human (not a droid who who only cares about your credit rating) and ask (with your 20% down) how much you can borrow with 10 and 15 years with a payment of no more than 1/3 of your take home pay.
This should give you a good bracket of what you should be looking for in a first home.
Try no to fall in love or get home fever, rent the cheapest thing you can get in the area you are looking, to give yourself time and space to buy the right thing.
I'm telling you this because I made the mistake of rushing my 1st home buy, just to sell it after 3 years with all the expenses that implies.
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Offline Halcyon

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Re: First house for a young man
« Reply #26 on: July 03, 2017, 09:26:41 pm »
Also, can and do lose money on homes. If you overpay and then are forced to sell you can loose big time.
Some suburbs in Sydney drop 30-50% after a boom, usually the exclusive ones with designer home were people overpayed for huge expensive houses on small blocks of land.

We have an entire generation of new housing investors who have not seen realestate prices stagnate or go down, or interest rates go up, they will be in for a big shock.

You could not be more correct!

You only need to look at most of these new suburbs in West and South-Western Sydney... Spring Farm, Oran Park, Gregory Hills, Jordan Springs... all come to mind.
 

Offline SKHILLBILLYSlures

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Re: First house for a young man
« Reply #27 on: July 03, 2017, 09:29:55 pm »


not even joking my dream house

I l've thought about buying a house for myself but have considered how cool it would to take my stuff with me where I went though work whilst traveling is the most confusing part. unless I went back to welding. how is it in one of those does anyone know? like how worth it is it?
« Last Edit: July 03, 2017, 09:38:03 pm by SKHILLBILLYSlures »
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Online Zero999

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Re: First house for a young man
« Reply #28 on: July 03, 2017, 09:44:15 pm »
Both houses have $180/mo HOA fee which covers all exterior maintenance fee and yard maintenance fee as well as public area maintenance fee.
What does that mean? Are the houses freehold (you own the land  & house) or leasehold (you just own the house)? Normally those sorts of annual fees are for leasehold but things may be different in your jurisdiction.

My advice is only buy freehold, avoid leasing like the plague, then you have no landlord to pay and you own the land for eternity. Leases don't last forever but for a limited term, which can cause the value of the property to fall, especially towards the end.
 

Offline cdev

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Re: First house for a young man
« Reply #29 on: July 03, 2017, 10:03:25 pm »
The US can be a great place- and it welcome immigrants- so, IF you really think the US is where you want to LIVE, and maybe start a family, not just work then BY ALL MEANS, do everything you can to stay here. Especially I would be very careful about getting into debt until you know for certain you can stay.
Bubbles bursting are not such a hypothetical situation. I also would not buy a townhouse (avoid "houses" with common walls shared with other homes. That is an condo apartment, not a house) or in a neighborhood ruled over by a "homeowners association". Ive heard a great many horror stories about them. Also, the quality and integrity (or lack of it) of local government varies a lot from town to town.

When the time comes to buy, try to buy in a neighborhood where people you already know and like live. US neighborhoods vary a lot. Also, I think small homes are far better investments now than large ones.

The price of energy (natural gas) in the US might be about to go up a lot. Figure that cost into your home maintenance costs.

Also, I would think long and hard before buying a house if you are not certain you'll have permission to stay in the US.

If a bubble bursts, after you buy, you could end up with an underwater asset, on the hook for a lot of money.

Frankly, to me it would seem irresponsible to buy a house if you're not sure if you can stay.

Houses should be looked at as something other than simply an investment. The issue of ghost houses which have been bought by distant investors as a place to flee to in the case of collapse or insurrections where they live, is a sore spot in communities where many longtime residents have been displaced by the insane rising cost of housing.

I would expect houses bought and left empty in such a manner to be heavily taxed in the future.
« Last Edit: July 03, 2017, 11:16:29 pm by cdev »
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Offline nctnico

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Re: First house for a young man
« Reply #30 on: July 03, 2017, 10:16:48 pm »
I would not buy a townhouse or in a neighborhood ruled over by a "homeowenrs association". Ive heard a great many horror stories about them. Also, the quality and integrity (or lack of it) of local government varies a lot from town to town.
I strongly agree. Home owners associations must be avoided like the plague! They are usually run by incompetent people or people who let their business friends do the work. Even worse: many of the homes falling under the HOA could be owned by a large company which has a 51% vote over what is going to be done and which company (their subsidiary company!) is going to do the work. Oh and let's not forget about increases in service fees.
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Offline nctnico

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Re: First house for a young man
« Reply #31 on: July 03, 2017, 10:19:47 pm »
I would not buy a townhouse or in a neighborhood ruled over by a "homeowenrs association". Ive heard a great many horror stories about them. Also, the quality and integrity (or lack of it) of local government varies a lot from town to town.
A real house here would be 300k+, still with HOA. Unless you build a house in a remote place, or buy a house built decades ago, you simply don't have non HOA managed houses, let along townhouses.
My primary goal is to get a house that doesn't need much of my attention, rather than a house I need to work on it every quarter, if not month.
Then put the money in an investment fund with a good spread of risks and rent a home. With HOA you will be worse off then renting. HOA is what we would call 'a trap for young players'.
There are small lies, big lies and then there is what is on the screen of your oscilloscope.
 

Offline edavid

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Re: First house for a young man
« Reply #32 on: July 03, 2017, 10:43:52 pm »
1. Should I spend all the money (read: ALL) on a house that leaves me no money at all (maybe a few k$ in checking account, but that's it)...

I sure would not feel comfortable with that.  I think in your situation you should have at least 6 months living expenses on hand, plus an emergency house repair fund.

Then put the money in an investment fund with a good spread of risks and rent a home. With HOA you will be worse off then renting. HOA is what we would call 'a trap for young players'.

Maybe that's true in NL, but in the US, an HOA full of picky people can be a very good thing for protecting the value of your property.
« Last Edit: July 03, 2017, 10:49:21 pm by edavid »
 

Offline cdev

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Re: First house for a young man
« Reply #33 on: July 03, 2017, 11:35:57 pm »
Oh, and especially, avoid mobile homes like the plague. Avoid any kind of home where you dont own any key part of it. There is an important psychological difference between townhouses and neighborhoods. Townhouses, the owners are usually away, you never see people outside, living in their homes.  neighborhoods, people are outside a lot, people know each other, kids can feel safe in other peoples yards and houses. You can leave stuff you're using outside and know its unlikely to be stolen, ever.  (for example, right now I have my e-field antenna stuck to a camera tripod so I can figure out the best spot, moving it around. I could never do that in a townhouse neighborhood. Also, although some people here hire gardeners, it would bug me to be forced to pay for one. Thats a lot considering that several months of the year you likely don't need any gardening at all.

I would consider a well built and maintained slightly older wood home that was built in the era when homes did not consist of so much plastic.

Some kinds of homes are just really nice to live in. Others, no.

My friend has atwo story townhouse that was in the Bay Area and cheap. I would make an exception for that.  A $200k "townhouse" in the Bay Area (around what she paid around 15 yrs ago=really good deal.)  I suspect even now, in NC, not really that much. Again unless you already know people you like there.

Try to get out and check out open houses to get a feel for what exists and what it costs. And again, dont think of it as an investment, think of it as your potential home for a long time. Then you'll make the best decisions. Also, look for area that have a diverse community - they often are the best in terms of value and investment too. Communities near colleges tend to be better places to live too. Also look at public transportation. If you drive a lot, sometimes you may want to take the bus when its convenient instead of driving. The further you get from the/an urban center the nicer it is to have a regular bus going in.

Some (big) cities you absolutely do not want to drive into.  I can be in midtown of one of those cities in a bit more than half an hour from where I live without driving and its great.

Again this varies a lot from town to town. Light rail or train connections are better than bus connections (easier to read or get work done, more predictable, as no traffic)  and having a choice between both is the best.
 
« Last Edit: July 03, 2017, 11:40:40 pm by cdev »
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Offline cdev

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Re: First house for a young man
« Reply #34 on: July 03, 2017, 11:45:49 pm »
Will 2008 "US crisis" repeat?

IMHO, you can almost bet on it if this passes.

"What the large print giveth, the small print taketh away."
 

Offline jpanhalt

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Re: First house for a young man
« Reply #35 on: July 03, 2017, 11:46:29 pm »
Maybe that's true in NL, but in the US, an HOA full of picky people can be a very good thing for protecting the value of your property.

Picky people "protecting property value" is the opposite of what I have seen.  In particular, a few years ago, I was looking for a new home.  I was shown a nice home in an HOA, so I asked for a copy of the covenants.  The realtor was a little reluctant, but knew she had to provide them.  In brief, the developer effectively retained control, but neither lived in the the HOA nor actually owned a developed property in the HOA.  Home value decreased substantially in my opinion upon reading the contract.  Goodbye!   Realtor countered with the "fact" that the developer was thinking of dissolving the HOA.  Right.  End result, I bought a property "fee simple" and have not regretted it for a second.  More than a year later, HOA home still had not sold.

1)   If you are considering purchasing in an HOA, read over the covenants very carefully and then get a more experienced person to read them too.
2)   HOA's primarily serve the interests of the developer.
3)  I can't imagine a situation in which I would buy a new home in a restrictive HOA administered by the developer.  Not all HOA's are so restrictive, except for conditions such as square footage and outbuildings.   Even residential building codes will include such restrictions.
4)  Rather than own in an HOA, I would seriously consider leasing a home.

The above comments also apply to a condominium but even more so.  Of course, there are markets  (e.g., NYC) where the only choice might be a condo, but I do not think Raleigh/Durham is truly such a market yet.

John
 

Offline edavid

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Re: First house for a young man
« Reply #36 on: July 03, 2017, 11:54:22 pm »
2)   HOA's primarily serve the interests of the developer.

Not in the common case where the developer is completely out of the picture.

What if OP's hypothetical large, angry neighbor does something obnoxious like parking a junk car on the front lawn?  Wouldn't OP prefer to dump the problem on the HOA?
 

Offline cdev

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Re: First house for a young man
« Reply #37 on: July 04, 2017, 12:09:17 am »
>>Quote from: vodka on Today at 12:20:19>Quote from: nctnico on Today at 11:07:03>Quote from: IanB on Yesterday at 22:16:31>Keep in mind that the costs of owning a house do not stop after you have bought it. Unless you are buying a brand new house there will be routine and not-so-routine maintenance costs that crop up. Such costs can occur anywhere from yard work, painting, fences, plumbing, roof, garage doors, appliances, termites, all sorts of things. Everything you expect the landlord to take care of when you are renting, you now become responsible for. Not to mention annual costs like insurance and property taxes.

Before buying, get some estimates of typical annual operating costs from homeowners you know or work with, and make sure you will have sufficient income to cover them. Owning a house when you do not have a full time job can be a recipe for poverty.
>>I agree! Also get the house checked from top to bottom to look for problems with rot and other potential money pits. To be honest: I wouldn't buy a typical US wooden frame house at all (except in earthquake areas)! Also check for things like quality of the sinks, taps, door handles, etc. That way you can see the current owners take care of their home or patch things up.

>>BTW another option is to have a house build so everything is new.

>>And how do you see the defects on the house, if it is hidden? For seeing you will have to break the wall or the floor. Furthermore, there is an other question. Whom does the inspection hole if there aren't defect? The buyer or the seller?


Check out inspectapedia.com  lots of info on possible risks in homes. Also, if you have a lot of money, sometimes people buy a house for the lot and remplace it completely. Just if you do that, build a house that fits in,  DONT build a ugly, box shaped house thats oversized for the lot or you'll alienate your new neighbors. Also, dont build a house and take more than a few months, dont spend a year building a me too, box like ugly house. (pet peeve of my own and many others)

Quote from: blueskull on Today at 16:17:15>Quote from: cdev on Today at 16:03:25>I would not buy a townhouse or in a neighborhood ruled over by a "homeowenrs association". Ive heard a great many horror stories about them. Also, the quality and integrity (or lack of it) of local government varies a lot from town to town.
A real house here would be 300k+, still with HOA. Unless you build a house in a remote place, or buy a house built decades ago, you simply don't have non HOA managed houses, let along townhouses.

Buy a home built decades ago, by all means! especially a nice, well built one thats underpriced because people dont recognize quality.

Quote from: blueskull on Today at 16:17:15>
My primary goal is to get a house that doesn't need much of my attention, rather than a house I need to work on it every quarter, if not month.

Then get a townhouse but dont expect it to give you what a house would give you, as it isnt quite the same. In particular, you dont get to participate in the all important ZONING BATTLES in your community because your entire HOA development is seen, legally by the local zoning board as one person for purposes of record, as one lot. and the HOA is the only entity that receives notice.  This means that some company could build some nightmare toxic facility right next to you and unless you scanned the local newspapers of record every week (good thing for any homeowners to do) you would never know until it was too late. Poof, there goes your investment and peace of mind.
« Last Edit: July 04, 2017, 12:22:39 am by cdev »
"What the large print giveth, the small print taketh away."
 

Offline cdev

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Re: First house for a young man
« Reply #38 on: July 04, 2017, 12:31:48 am »
How many postdocs end up with full time jobs in their chosen field? (science) ? Is there still a big problem with perpetual postdocs?

See, if we want a society thats going to have jobs for all these scientists and especially, people with humanities degrees, we're going to have to change course totally. Because the future they are building us is one which doesnt value learning much and ideally, in their eyes, doesn't "need" practically anybody.

narcissists (what we have in charge now) hate needing others to the extent that they will go way out of their way to sabotage the lives of anybody they perceive themselves as needing.
« Last Edit: July 04, 2017, 12:35:09 am by cdev »
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Offline cdev

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Re: First house for a young man
« Reply #39 on: July 04, 2017, 12:45:15 am »
This is a radio segment from the era of the US housing bubble that everybody should listen to.


The Giant Pool of Money
This American Life


This gets one of my top recommendations for online content.

Listening to this, people will see that the crash of 2008 was like an inside bank job. they knew in advance that it would crash.

This should serve as a warning to everybody.
"What the large print giveth, the small print taketh away."
 

Offline seatrix

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Re: First house for a young man
« Reply #40 on: July 04, 2017, 12:59:42 am »
Do not invest in fixed assets, the global fixed asset prices will fall in the future
 

Offline cdev

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Re: First house for a young man
« Reply #41 on: July 04, 2017, 01:12:30 am »
You're assuming here that everybody who exists in your world view can apply to and be accepted to the best public university in the state. But in reality, only a very few are that talented. And its not just because of bad life choices, its because they never had access to the kind of ideas that would have gotten them interested. Society now writes many poor Americans off before they were even born. Its much worse now than when I was growing up. And outside of tech, in so many areas, the entry level jobs are all "internships". Meaning unpaid work. Worse than perpetual postdocs.

So public higher education that you count on existing, here, is under attack.

What about in a few years when its gone private?

Or perhaps I should be asking, what happens in a few years, when the bulk of work is automated, jobs are increasingly scarce for all but the very very brightest, and the Kool-aid of capitalism so many have drunk so deeply of, starts wearing off?


Quote from: blueskull on Today at 18:43:20>An in state student needs only to pay half the tuition and they are allowed to work to make living cost, and I know guys who can support all their living costs on their own labor. That means their family only has to pay $40k for the entire BS degree.

But dont people need at least an MS or PhD now to get a good, permanent, stable job in the sciences? (except maybe in engineering)

Quote from: blueskull on Today at 18:43:20
Considering average household income in NC is $53k per year, I don't think there is any difficulties for a US student to attend STEM education.


Whats happening is the middle is vanishing and the extremes of income are fattening. An M shaped distribution.  The trade agreement I'm talking about may also undermine the kinds of jobs you're talking about which grad students depend on. We may even see those jobs getting outsourced, seriously.
The problem I can see is the demand of higher quality of living. If you want high living quality (say, driving a Porsche, go to bars every a few days and join frat houses) without having a rich family, then that's your own issue.

The middle class families that I'm talking about arent like that at all, NONE of them drive Porsches.  More like ten or fifteen year old Toyotas. Most young people I know could never afford to buy a new car.

If you are willing to live a poor and minimalistic life for 4 years, then an average US household should be able to fund a kid to go to college every a few years. Considering age difference of siblings is ~3 years, that should not really be an issue.


Should be but again, you're making assumptions which just arent realistic. The key to all this would be teachers, but the US is bending over backwards to discourage people from entering the teaching profession.

Quote from: cdev on Today at 18:09:17>Those who think they can go into non-STEM careers and have a stable working life are about to get a big surprise in the form of the aforementioned international services agreement which will offshore a lot, perhaps more than half of those kinds of jobs, especially ones in sectors formerly thought to be safe like quasi-public service/government.  Remember all the incredulous posts in the recent Grenfell Towers post about how employees of this dysfunctional local council were still sending emails several days after the twoer burnt causing heavy loss of life wondering why they werent answering phone calls for some kind of language tutoring appointments. Thats a sign that they were outsourcing all those jobs literally to the other side of the planet. Thats coming to the US soon too, and its going to decimate certain kinds of jobs. At that point, home prices will fall, a lot because some communities will be hit so hard people will just stop buying, and tax receipts (how towns fund themselves) will dry up. They will have to raise taxes and that will cause even more problems. What I'm trying to say is the best thing the current Administration and the Democrats too could do would be resign en masses and tear up all trade agreements, NOW.

>>That's an American problem, not mine. The rule of the world, boil down to the root, is to make as much money as you can. Bosses tend to screw up their employees if they are not competitive.

Blueskull, we want to welcome you, but if you want that from us you have to see our problems here as your own too, because they are. Because if you put down roots here, you will be one of us. Also, the whole world's problems are interrelated.

>>Think of Japanese white collars, they work form 9am to way after 5pm, sometimes after 9pm or later. That's why Japan is so innovative, technically developed and yet can still compete China on price in a lot of product categories.

Yes, and big parts of Japan are virtually abandoned because the stressed out Japanese have almost stopped having children.  The schools, carefully shuttered up for the day the children return, are particularly touching. Something is broken in a society that treats people like this.  We're now making it possible for people to do what they want. Soon its going to be possible to have only those who really want to do something and like what they do, work. I put forward that as things get more competitive, it becomes impossible for people who just want to do things for money to ever get to be the best at whatever it is, and if thats what it takes to be hired, its going to leave most people out. But thats okay because not that many will be needed unless we work at making an inclusive society.

>>The development of a country is bound to be the deprivation of the workers.
Eventually advantages of the western world will be no longer exist, and that's bound to happen as the competitors are rising. Japan, Korea, Singapore, China, and now Vietnam, and I believe Africa is not far away.

The alleged advantages of the "western" world came from fairly egalitarian nations many of us here grew up in in the postwar labor scarcity years, brought about by exactly what they're trying to eliminate, public services, delivered to end users below their costs. Public universities, public water systems, public transportation, and highways, and especially public health systems.

China is trying to emulate that level of public investment it seems in some area (the richest areas in China?) But China is still way behind. India is far worse off. India it seems now, post Modi, doesnt even try. 

And in the US, it seems, becoming more like India every day. Massive greed and privatizing everything and rigid caste systems will eliminate the alleged Western Advantage faster than anything else.


However, I can see that not to happen to US at least in the next few years, and I am pretty sure I will sell this house in less than 10 years.
« Last Edit: July 05, 2017, 02:49:43 am by cdev »
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Offline cdev

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Re: First house for a young man
« Reply #42 on: July 04, 2017, 01:14:27 am »
What would happen in this world if suddenly, we all started caring about one another's countries, and trying to improve the quality of life for each other, as well as ourselves?
"What the large print giveth, the small print taketh away."
 
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Offline cdev

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Re: First house for a young man
« Reply #43 on: July 04, 2017, 02:13:12 am »
Its not a racial thing, poor is the new black. Basically, TPTB's vision of the future isnt an inclusive one because that prevents the race to the bottom they have been fantasizing about and cultivating for decades. they feel entitled to cash in on that race to the bottom, they want to bring it on, they all feel entitled to get in on it.

We're all in the way, speed bumps on their road to success.

If you want to understand wealthy Americans - a good analysis, old but still holds true is this one.


Quote from: blueskull on Today at 19:43:15>Quote from: cdev on Today at 19:12:30
You're assuming here that everybody who exists in your world view can apply to and be accepted to the best public university in the state. But in reality, only a very few are that talented. And its not just because of bad life choices, its because they never had access to the kind of ideas that would have gotten them interested.
Society wrote them off before they were even born.

From my personal experience as a teaching assistant, I see a lot of young American students being not very talented while still manage to do great things. I refuse to believe that there are insufficient funds in the great vaults of opportunity of this nation.
Quote from: cdev on Today at 19:12:30
But dont people need at least an MS or PhD now to get a good, permanent, stable job in the sciences? (except maybe in engineering)

What's wrong of being an engineer? Not every one must be the leading edge researcher, but on the other hand, it doesn't mean everyone else must be in a shit hole.

I meant that engineers are more talented than some theoretical sciences. Or skiled in a way which they still need. But increasingly, they'll be able to get subcontractors for a fraction of what they cost them now.
« Last Edit: July 04, 2017, 02:24:28 am by cdev »
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Offline cdev

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Re: First house for a young man
« Reply #44 on: July 04, 2017, 02:15:50 am »
Invent TNT and then endow a dynamite Peace Prize!

Quote from: blueskull on Today at 19:35:27

Did you mean utopia? If you find a way to implement that globally, you get Nobel Peace Prize.
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Offline cdev

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Re: First house for a young man
« Reply #45 on: July 04, 2017, 02:31:02 am »
What I'm trying to explain is that we're in a really unhealthy cycle.
----

I would be very careful investing now.

Try to stay debt free, if you can.
« Last Edit: July 04, 2017, 02:42:24 am by cdev »
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Offline cdev

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Re: First house for a young man
« Reply #46 on: July 04, 2017, 02:43:49 am »
When Americans like me talk about America, I think most of us, our loyalty is to a bunch of ideas, and people, more than a place.


Listen to that This American Life episode.  The world has a real problem right now with speculation. Its like a Ponzi scheme which eventually has to crash.
« Last Edit: July 04, 2017, 04:06:57 am by cdev »
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Offline IanB

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Re: First house for a young man
« Reply #47 on: July 04, 2017, 03:26:46 am »
in the US, an HOA full of picky people can be a very good thing for protecting the value of your property.

Yes, that's the story realtor's tell, but the reality is different. Most people are only suckered into an HOA once. When they move they will  try very hard never to be in an HOA again. HOA's take away your freedoms and limit what you can do (e.g. prevent you from parking in your driveway, or hanging washing out to dry, or erecting a TV antenna). Restrictive covenants like that can only devalue a property, never increase the value of it.
 
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Offline cdev

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Re: First house for a young man
« Reply #48 on: July 04, 2017, 03:53:08 am »
Also stay away from adjustable rate mortgages.
 :bullshit: :wtf:
"What the large print giveth, the small print taketh away."
 

Offline IanB

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Re: First house for a young man
« Reply #49 on: July 04, 2017, 04:00:24 am »
Also stay away from adjustable rate mortgages.
 :bullshit: :wtf:


Yeah, they really suck. Every time my friends refinanced to get a lower rate, my rate just went down automatically at no cost. That has been really terrible  ;D
 


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