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TheJanks t1_iwvcxsq wrote

I'm so tired of my daughter paying rent, I'm tempted to cosign a loan just to stop seeing money thrown away.

6.5%. ouch.

At least doing the math she can claim all the interest over $13,000 on her taxes and get a refund. $13,000 is a lot - but it's still lower than the amount of rent thrown away. Years down the road when the interest payments will be lower than a deduction, maybe the interest rate will be lower for a refinance.

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cedarapple t1_iwvo7bg wrote

The standard deduction in 2022 for single filers is $12,950 and $25,900 for joint filers. Getting a house for the interest rate deduction is one of the dumbest reasons to buy.

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Amerisu t1_iwvsuwt wrote

True, but at least you're getting some equity from your payments.

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TheJanks t1_iwvv4a8 wrote

More like trying to buy the house so we’re not throwing away rent. The tax deduction is trying to be a silver lining

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cedarapple t1_iwvzian wrote

You are not "throwing away rent", you are renting a place to live in. When you buy a property you are making a mortgage payment in order to have a place to live in. In the first ~10 years of a mortgage nearly all of the payment consists of interest (sort of like paying rent to a bank for the use of its money) with a small portion of the payment going to principal (equity).

When deciding whether or not to buy you should determine if renting is less or more expensive than buying a roughly equivalent house with a mortgage payment (taking into account higher maintenance and insurance costs for owners). Also consider the increased flexibility that renting offers for relocating if necessary.

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ScrewAttackThis t1_iwwmt8y wrote

>Also consider the increased flexibility that renting offers for relocating if necessary.

That's been a big one for me. I haven't lived in a single city for more than a few years the past decade. Buying just never made sense. Now home prices are so high it doesn't make sense. Somehow they went up like 50% in 2 years. How that's supposed to be sustainable is beyond me.

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zzyul t1_iwwabwa wrote

And if someone recently bought a house for $600K and has to move in 2 years and it’s only valued at $500K, they threw away $100K buying at the top of the market. Buying is not always the best option.

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TheJanks t1_iwwlcpu wrote

Oh I know.

After plugging in the numbers and taking into account the market right now, I think waiting at least half a year may be smart then revisit.

The neighborhood with new construction was throwing out incentives and looking at 90% drop in home sales, this is not going to get better quickly.

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TheGoodKindOfPurple t1_iwvomqa wrote

If you put down 20% you avoid paying PMI and the mortgage is at least a predictable expense. I hope you can find the right deal.

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ba_cam t1_iwvq5d6 wrote

On a modest house in my area, at 400k, who the hell has $80,000 just laying around?

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TheGoodKindOfPurple t1_iwvwl8x wrote

Oh hell, you must live in one of those places that people actually want to live in. Come to the Midwest, we have corn!

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TheJanks t1_iwvvbqz wrote

And that can be a fight. My current mortgage they said they knew all home values went up so I had to buy some kind of appraisal to prove to them that I still paid off 20% of the current house price. They didn’t care anymore if it’s 20% of what you paid more of what it’s worth. You gotta work to get that shit removed.

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