Not only that, but Dave is morally opposed to debt of any kind, and advocates saving up for a house!
Quote:
Let’s say you want to save up $100,000 for a home. Divide $100,000 by the amount you can save each month to determine how long it will take to get there.
$100,000 ÷ $1,000/month = 8 years, 4 months
$100,000 ÷ $1,500/month = 5 years, 7 months
$100,000 ÷ $2,000/month = 4 years, 2 months
$100,000 ÷ $2,500/month = 3 years, 4 months
$100,000 ÷ $3,000/month = 2 years, 10 months
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Why spend 15 - 30 years paying off your house when you can spend 14 - 28 years saving up for a house before you even live in it?! Also, who can save one to three thousand a month and wants to live in a $100,000 house?
Fine. Let's give him a chance and do the math. You may not get much in interest, but who wouldn't prefer to earn interest instead paying it?
The thing is, I am going to assume that home values go up 3% a year, although that will make little difference in this bizarre scenario.
First of all, it will not make much of a difference, but if the housing market increases 3% a year while you are trying to save, the $100,000 house will be worth more like $102,493.80 by the time that you saved up 20% down (at $2,000 a month).
Using his calculator, putting 20% down, and financing $81,793.33 at 4%, you would have $605.02 payments on a 15-year loan, and you would pay off your house almost two months sooner than if you put $2,000 a month into savings at 2%. As long as the house appreciates the entire time, your investment would be gaining value instead of needing to save up more and more as the housing market grows faster than your interest.
But wait! There's more!
If you pay $2,000 a month towards your mortgage, you are covering your housing and paying off your debt. If you are still renting somewhere then the $2,000 is on top of your housing, so calculating an extra $2,000 a month towards your mortgage: You would pay it off in two years and nine months, paying $4,749.21 towards interest, instead of paying a landlord $33,276.10.
I think there is an argument for paying mortgage insurance instead of a landlord.
All aboard for the rabbit hole!
First of all, all that I can find for around $100,000 in chic Show Low is that 520-square-foot house for $79,000 this... thing... Two bedrooms, one bathroom, and nine hundred square feet for $119,000. Sorry Dave, we are way over budget!
For the love of McGyver, when I say "Show me houses, not land or mobile homes, from cheapest to most expensive" I get four times as many lots and mobile homes as actual houses, like I specified. They are not sorted properly, either!
I removed all filters and still couldn't find anything worthwhile. This reminds me of why I like Homemade Home's approach. He and other guys talk about driving around, looking for abandoned houses, and finding ones that cannot be sold for some strange reason. Mr. Homemade Home says that he found one where the owner died, but it was still in their name, so he drove a couple of hours and ran through a graveyard in order to get a death certificate.
He bought that house for something like $10,000.
Someone else said that you track down the owner of a home and get them to share what needs to be repaired. Then you say "So, what you are saying is, with the current market, and needing to fix [long list] you feel your house is worth [lowball]."
Allegedly that makes them think that number is their idea and the market is the bad guy.
I have no idea if it works, but the only two houses that I found were $79,000 and $119,000. I would not want to pursue either.
Let's say that something decent comes onto the market while we are saving for a down payment. We only have $10,000, but we are desperate to not be left with leftovers. Zillow says that we would pay $44 a month on a $90,000 mortgage.
Wait, what?
Seriously? We are supposed to keep paying rent while the housing market grows without us instead of paying $44 a month for "Protection?!"
If you only put $3,500 down, 3.5% of $100,000, Zillow says that your protection money would be an overwhelming $79.
How is that worse than paying rent?!
Quote:
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Matt W. from Chattanooga, TN, bought his first home—a 1939 two-bedroom foreclosure—with a $19,000 cashier’s check. It wasn’t in the best part of town and needed a lot of TLC, but Matt and his new bride poured a lot of sweat into renovating it. Their hard work and patience paid off. Last year, they sold their honeymoon cottage for $64,000!
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He is playing that game?!
Well, Zillow does not show any houses in foreclosure or preforeclosure.
Aw dang. I checked Craigslist and found this house almost an hour away:
$64,900 Spacious Fixer Upper! Offering Potential! Realtor.com says that it is 2,111 square feet and cash-only.
Save me, Kevin!
Lame. Clickbait title is clickbait. I tried to hide it.
He found a cash-only short sale [with the buyer needing to pay a restoration company]. He offered 25% down with no appraisal contingency and specified "if buyer's lender or appraiser requires any repairs as a condition of this loan closing seller authorizes buyer to complete any required repairs on the property and hold the seller harmless of any liability. If the sale does not go through for any reason seller will keep all repairs made at no cost to seller and buyer agrees to lose the money they invested fixing the property up."
So there, as long as you have 25% down and can pay for repairs, you too can get a conventional loan on a cash-only house.
However, I do not have anywhere near 25% of $65,000 ($16,250). I wouldn't know where to get the money for repairs, either.
Oh well. I was not that curious how many trips to the Show Low Lowe's and Home Depot it would take.