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Owning A Home Is Over Rated

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From the article:

"Schnepper's take: Ain’t gonna happen!

At least not in the form presented. However, get ready. The mortgage-interest deduction is going to be limited. The panel understands that the size of the mortgage cap has helped push home prices to record levels in many markets. I wouldn’t be surprised to see the $1 million cap on qualified borrowing cut to $300,000 to $500,000, with no deduction for interest on anything other than your principal residence."

My take: Even this won't really happen. There have been tax panels put together over and over again, and they have always faced fierce opposition from all involved.

Also playmaker, I agree with you about Rich Dad, Poor Dad. Kiyosaki should be required reading before graduation of high school.

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Most Americans cant afford their new homes and will get a wake up call when their hybrid mortgages collapse.

Sorry, but this is the borrower's own fault. Hybrid mortgages (aka interest-only and negative-equity loans) are made for a certain purpose. If you use it for the wrong reasons, you shoot yourself in the foot. The borrower has to research and be aware of the pros/cons of any finance arrangement. If you are using one of these because you need a lower payment, you goofed. You bought too much house for your means and it's your own fault. These loans are made for short-term residencies where you know going into the purchase that you will be keeping the house for less than 5 years.

Points on a loan is another issue where consumers simply don't know what they are doing. PAY THE POINTS if you are taking on a 15 or 30 year note. A one point reduction on a $200,000 mortgage will cost you $2000 up front, but will save you over $123,000 in interest over the life of a 30 year note.

Speaking of 30 year notes...again, you may be just buying too much house if you have to go that route. If you can't afford the extra $200 per month per $100,000 financed to go with a 15 year mortgage you are living too close to the edge. With a 15 year note you save about $67,000 per $100,000 financed over the life of the loan. Either that or pay one extra payment per year...that will shave nearly 10 years off a 30 year note and save you over $100k during the term.

Lenders count on consumers being short-sighted to make more money. Don't be one that gives them what they want.

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Let me tell you a little story about how I fell into the myth trap that owning a home is something that every American should do.

DITTO, DITTO, DITTO, DITTO!!!!!! You have told MY story and boy am I glad. Homeownership IS overrated and my experience woke me up out of that so called "American Dream"!!

Some of the reasons you listed are exactly why I gave mine back to to the bank...the so-called American Dream isn't for everyone. Certainly...not me!!! It's a bunch of crap and now I have to start all over. I wish that I would NOT have purchased that home. That was the BIGGEST, BIGGEST mistake of my life. And definitely the one that lead me into the "poor house". Prior to buying a home...I had absolutely NO worries, especially financially.

My whole team (the attorney, realtor, mortgage processor, etc.) failed me...they were only in it to line their pockets. Once the deal was over and done...I couldn't even feed my children, I lost an enormous amount of weight and was stressed beyond the limit. In my opinion it is not worth it.

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No offense, but unless there are some other extenuating circumstance that you left out, you didn't have to take the "deal". You should have known from the get go what you were getting in to. If you didn't, then you didn't research enough. I think you're wrong in blaming your attorney, borker, realtor, etc, as I doubt they forced you to sign anything.

I would ASSUME (yes, I know what that means) that the majority of people on here would not share Nazarite's or the OPs opinion.

This is just my opinion, and I appologize if you're offended by it.

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That is a shame that both of you feel that way. Most people get a nice tax break, build equity, and enjoy the everyday benefits of homeownership. Besides, its a HUGE hedge against inflation, which you don't have as a renter. So while your annual cost may be a bit lower as a renter, you get left behind in terms of real wealth without owning a home.

It sounds like there are some extenuating circumstances that unfortunately put you in the small minority.

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First of all, and I mean do disrespect, you have absolutely NO IDEA what my situation was, I only posted the end result and how I felt about it all.

Owning a home is a great way to go, don't get me wrong, but it ain't for everybody. Maybe in three years or so, I'll try it again..this time my eyes and ears will be WIDE OPEN. I've even chosen to become a real estate agent so that NO ONE (at least not any of MY clients) will get burned the way I did. It was defintely a learning experience and while I am not placing the entire blame on my so-called team, I have to own up to my shortcomings as well -- that's the ONLY way I'll grow and understand. However, if you REALLY knew the deal, SOME of the blame can only be placed on them (my team). It's a business and people tend to care MORE about their profit then doing what they were paid to do. Again.....your opinion is yours and my experience is mine.

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As I originally stated:

"No offense, but unless there are some other extenuating circumstances that you left out"

But the way your original post sounded was like owning a home was a bad idea.

The only way I can see it not being great for most people is:

1). You move around a lot and

2). You couldn't afford it to begin with.

The above said provided that all neccessary research is done and you're not getting in to some house the requires a bunch of repairs and work.

That's not say that things can't happen after owning a house that can cause it no longer be affordable. But then I think the blame is incorrectly placed on home ownership. It's not the home's fault that you lose your job, get sick, car accident, etc. Life happened and I don't believe it should be attributed to owning a home. The same thing could have happened if you leased/rented.

Again, just my opinion

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