So if buying a house on a 15 year mortgage is the only way to do it, but people should also live within their means, does that mean that people that could afford a 30 year mortgage but not a 15 year should continue throwing their money away in renting to stay within their means?
The difference in monthly note is not that dramatic for a 15 year vs. a 30 year note (at least it wasn't two years ago when we bought our current house.) I have a 30 year note because I never know when I might want to sell and be in a different house, so paying it off faster isn't necessarily that important for me.
It certainly applies more to undergrads, but it is very easy to get a graduate level degree for free. I got my MA paid by PriceWaterhouseCoopers and Northrup Gruman paid for my best friend's MBA. The Mayo Clinic is paying for a buddy of mine's post graduate work in biology in exchange for some indentured servitude. The fact is that no one is forced to go to Princeton or Yale and there are many hundreds of thousands of successful people who went to state schools. I say go to school where you can afford to go. Prepaying for most anything is not very financially smart. College has historically grown in cost at about 7% while the stock market historical average is just under 12%. A good 529 or ESA is far supperior to prepaid school. Generally a 15 year mortgage runs only about $300 more than a 30. When we financed I could do a par 30 at 6% or a par 15 at 5% the difference was $296. Also I would not use debt to finance an investment property. Too much can go wrong. You may not find a tennent. The tennent may be a dead beat. You may lose your job. The roof might get blown off in a storm. One of the reasons I did a 15 year mortgage is so I can save money in the long run and invest in paid for real estate.
Yeah I know...I used to work for a loan software company at the time I bought a house (about 4 months ago) and I was considering doing 15 year versus 30 year. I used the calculator in our software and the difference was about $400 (~$950 up to ~$1350) if you were financing ~$140000 with 6.125% interest. Still though, $400 could be a deal breaker for some people. Like you, I don't plan on being in this house for that long so paying it off tomorrow wasn't a major concern. I did sign up for the biweekly payment system though which is supposed to cut about 10 years off of your loan because it equates to an extra payment. Seems to be working out so far. I was mainly just being facetious in my previous post. Trying to have a little fun on a day where everyone seems to be so hostile.
Well the difference between a 30 and a 15 is not that great. I think throwing money away on a cheap rental is supperior to throwing money away to interest in a 30. Here is an example for a ten year scenario. You rent an aprtment for 4 years for 500 a month and save 1000 a month. At the end of 4 years you have wasted 24 K on rent. You use your 48K as a downpayment on a 208K house. You finance 160 at 5%. Over the next six years you will throw away just under 41K in interest. In this scenario 10 years from today you have wasted 65K but have 99K in equity from the down payment and principle payments in your house. You already have the 48K and you buy a house on a 30 year mortgage at 6 percent. In the same ten years you will throw away 89K in interest, so you have already lost more than the dude who bought the 15. You will have around 75 in equity from the down payment and principle payments in your house.
"If by that you mean, being self reliant instead of lazy and waiting for people to do things for you, then yes he is the exception." The topic was student loans. You suggest that being self reliant (not using student loans) was lazy. Geez. There you go again. I made no value judgment about the expense of school, only that it was costly enough to make student loans necessary. Neither have I mentioned "assistance", as in handout. A student loan is a loan--it pays back with a small profit. Well, yes you did. The self-reliant worker versus the lazy borrower, see quote above. The point is that borrowing is an increasingly necessary way to do this for those without trust funds, scholarships, and parents who pay like you. Most kids have none of those. But if they make the grades, get the degree, get a job, and pay back their loan with interest. I don't have a problem with it and I damn sure don't see why you do. I don't see your objection to loans at all. Nobody is arguing that college is not a privilege. A student loan is not a privilege either, it's a simple contract. Now you want me to defend imaginary arguments? :insane: I've already said it several times. You imagine many other messages when I have said nothing of the kind. But once more ... with feeling. The point is that borrowing is an increasingly necessary way for students to afford college expenses in the 21st century. Period. End of Point.
Or you could add one-twelfth of your monthly payment in additional principal to every payment. 6 of one...
Right....but this way I don't even have to write a check and it doesn't hurt quite as much paying half every 2 weeks as it does paying the full amount every month. The smaller number gives me a false sense of security.
No where did I say getting student loans was lazy. Provide the quote or stop twisting my words. No, I didn't and further claims on your part are an outright lie. Where did I state that I had a problem with any of this?? WHERE??? I can understand your confusion, because I NEVER SAID THAT. I even took out a loan myself during college. You have repeated this falsehood about me how many times now? I see it as an option. Not a necessity. Much less one that has to bankrupt our children's future. You have been shown examples of people that chose to not go this route but you discount them. Since the increasing cost of college is unlikely to change, and you say that students must increasingly borrow $ to get their education, is this a bad thing?
I'm done with you. If you can't argue a point without hysterical raving and personal insults, then go argue with yourself.
