Home buying thread

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Cad

Cad

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Flobee said:
Have some (potentially stupid) questions RE: early mortgage payments and the amortization schedule. We're considering cashing out our 401k's in the next year or two due to some concerns I have about the safety of that tax vehicle (we'll see if clown world politics continue or not). If I did decide to do that the question would be how to deploy that cash.

I do think that we're going to look to pay off our mortgage as early as possible despite the obvious downsides, but I'm unclear on what if any benefits exist to making large payments early on the mortgage that may not pay off the entire balance. Is there any benefit to say, paying off 50% early in regards to interest payments and the amortization schedule? As I recall from reading about this before its generally recommended to just hold the cash until you can fully pay the mortgage but curious if there are any benefits or alternative strategies in that area.
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Interest is calculated by remaining balance * interest rate. If you pay the balance down by half, your future payments will be going more to principal and less to interest because you're paying less interest. So thats the benefit.

I'm not commenting on whether liquidating 401k and paying off house is a good idea or not; just answering your question about the interest.
 
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Mizake

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To further elaborate......remember what you actually pay for a home is the base cost plus all interest. For example, when you buy a home for $500,000 and you finance it with a mortgage.....you are going to pay a hefty sum in interest. That home may end up actually costing you $800,000. Notice also when you have a mortgage, a large portion of your initial payments go to interest, and only a small part to principle - towards the end of your mortgage, most of it goes to principle and little or none to interest. Lenders do that on purpose of course. They know most people do not keep their homes for the entirety of the life of the loan, and they will likely end up selling and moving to another home within 10 years. Paying your home off early means decreasing the amount you pay in interest and therefore decreasing the actual purchasing price of the home, sometimes significantly.

So when is it a good idea to pay off a loan early? Well, first is how much you are paying in interest. RIght now, interest rates are so low that it may make better sense to invest your money elsewhere rather than paying down a low-interest loan. That being said, I personally HATE paying interest on just about anything, so I tend to put a large downpayment or just buy homes out outright with cash. It depends on your personal financial situation. If you are younger, I would probably advise you to use that money and invest. If you were older, I would probably advise you to decrease your debt load overall.
 
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Tmac

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So, my wife and haven't been on the same page about where to move.

We live in a small town around my entire family and she is aching to move out of state before we have kids, because of the adventure and experience. I'm way more practical and with my business still being pretty young I don't want to leave my dad on the hook. It's created a bunch of tension with the whole situation.

So, I brought it up to my dad today saying that we'd been thinking about taking a two month RV trip or even moving out west and he said, "Well if you're ever going to do that, now is the time." We talked a bit about how it could work and I am totally relieved. I feel pretty excited now too.

Having said that, where are the coolest places to move in regards to mountains, scenery, etc?
 
Blazin

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Tmac said:
So, my wife and haven't been on the same page about where to move.

We live in a small town around my entire family and she is aching to move out of state before we have kids, because of the adventure and experience. I'm way more practical and with my business still being pretty young I don't want to leave my dad on the hook. It's created a bunch of tension with the whole situation.

So, I brought it up to my dad today saying that we'd been thinking about taking a two month RV trip or even moving out west and he said, "Well if you're ever going to do that, now is the time." We talked a bit about how it could work and I am totally relieved. I feel pretty excited now too.

Having said that, where are the coolest places to move in regards to mountains, scenery, etc?
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Wife and I looked at the Loveland, Fort Collins, Estes Park area for years planning to move there before finally giving up this year and buying land here in PA. As far as a trip head to RMNP if you have never been there, one of my most favorite places in the country. Have been going hiking/climbing there for over 20 yrs.
 
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TheBeagle

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Colorado is full of people now. It really isnt what it used to be if you crave some solitude and space.
 
lurkingdirk

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TheBeagle said:
Colorado is full of people now. It really isnt what it used to be if you crave some solitude and space.
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Blazin said:
Yes CO has changed ALOT and not for the better. At least in regards to its inhabitants.
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While I don't entirely disagree with you on this, I spent some time there this summer, and there are definitely places where you'll have as much space as you want. And even if you live in a biggish place like Boulder, you're a 45 minute drive to a 12,000 foot peak you can climb whenever you want.
 
Gravel

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I'm partial to southern Utah. I'm going to go out on a limb and say it's the most beautiful place on earth.
 
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Gravel

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lurkingdirk said:
It's gorgeous, but dang is it hot.

I'm curious, do you know what real estate is like there? Pricey or not bad?
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True. I lived in the Mojave the last 8 years though, so my tolerance for dry heat is high.

It depends on where at. If you're near a national park it's fucking crazy expensive. Anywhere else though and I think it's pretty reasonable.
 
BrutulTM

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lurkingdirk said:
While I don't entirely disagree with you on this, I spent some time there this summer, and there are definitely places where you'll have as much space as you want. And even if you live in a biggish place like Boulder, you're a 45 minute drive to a 12,000 foot peak you can climb whenever you want.
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The question to really ask yourself is how often do you really want to climb a 12,000 foot peak? If you're like most people it's about 3 times per lifetime even if they claim differently. When I lived in the bay area people used to say "I would never live far from the ocean" and I would always hit them with "when was the last time you went to the beach?". Usually it was 10+ years ago. Nobody goes to the beach in the bay area. It's fucking cold and windy but people still have a romantic feeling about it and use it to rationalize the outrageous cost of living in that area.

There's people who actually do surf every morning or spend every weekend at the beach but if the beach or the mountains are something you do every 5-10 years which is most people especially as we get older, paying an extra $10-50k a year to live close vs. driving a few hours or buying a $400 plane ticket every few years just doesn't make sense.
 
lurkingdirk

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BrutulTM said:
The question to really ask yourself is how often do you really want to climb a 12,000 foot peak? If you're like most people it's about 3 times per lifetime even if they claim differently. When I lived in the bay area people used to say "I would never live far from the ocean" and I would always hit them with "when was the last time you went to the beach?". Usually it was 10+ years ago. Nobody goes to the beach in the bay area. It's fucking cold and windy but people still have a romantic feeling about it and use it to rationalize the outrageous cost of living in that area.

There's people who actually do surf every morning or spend every weekend at the beach but if the beach or the mountains are something you do every 5-10 years which is most people especially as we get older, paying an extra $10-50k a year to live close vs. driving a few hours or buying a $400 plane ticket every few years just doesn't make sense.
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Yeah, I hear you on this, but I know it isn't true of me. I lived near an ocean for 3 years, did ocean things every chance I got. I lived a while in mountains, too, climbed every peak multiple times, nearly every weekend. But there is a shelf life for those things. If I lived there for 20 years I'm sure I would not be as voracious in my local activities. Because I've lived in mountains and done those things, and because I've lived near an ocean and done those things, I don't feel any great compunction to move to either anymore. I live in a great place with access to the Great Lakes (which are better than the ocean imho), big cities for things like opera, symphonies, galleries, and great restaurants, and an airport that can take me to mountains or oceans or whatever. And the cost of living is super low. Sounds like a bargain to me.
 
TheBeagle

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lurkingdirk said:
While I don't entirely disagree with you on this, I spent some time there this summer, and there are definitely places where you'll have as much space as you want. And even if you live in a biggish place like Boulder, you're a 45 minute drive to a 12,000 foot peak you can climb whenever you want.
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Couple years bacj I did my first 14'er, Mt Sherman, which is pretty isolated for Colorado. Nearest town is Leadville an hour away. It was a damn congo line all the way up and all the way down. A few years back I spent 6 months in Salmon Idaho and explored the Beaverhead and Lemhi ranges and those are still pretty isolated and clear of people. Beautiful alpine lakes full of big trout, great elk hunting, and land is still reasonably priced. No amenities though, so if you have a fancy wife not a great area to put down roots.
 
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Sanrith Descartes

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BrutulTM said:
The question to really ask yourself is how often do you really want to climb a 12,000 foot peak? If you're like most people it's about 3 times per lifetime even if they claim differently. When I lived in the bay area people used to say "I would never live far from the ocean" and I would always hit them with "when was the last time you went to the beach?". Usually it was 10+ years ago. Nobody goes to the beach in the bay area. It's fucking cold and windy but people still have a romantic feeling about it and use it to rationalize the outrageous cost of living in that area.

There's people who actually do surf every morning or spend every weekend at the beach but if the beach or the mountains are something you do every 5-10 years which is most people especially as we get older, paying an extra $10-50k a year to live close vs. driving a few hours or buying a $400 plane ticket every few years just doesn't make sense.
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Truth. 50 years in SFla. Once I got into my 30's we rarely went to the beach. It just became a chore to pack the car, unpack the car, find a place to park etc. The cities making it a pain in the ass to get to didn't help. It's still beautiful and if I was working or driving I would always take a scenic route to enjoy the view, but to spend the day there, nah.
 
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Fucker

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Not directly home buying, but my PODS arrived today. Cost close to $2500 to ship their 8x8 container halfway across the country. Took them two weeks to the day from pickup to delivery. It sat in an enclosed warehouse most of the time.

Not a single item shifted. It arrived exactly as I packed it.

I used an Optimus tracker to keep an eye on its location. It worked exactly as advertised. It proved to be quite useful. PODS called and told me there would be a 2 day delay in delivery because their truck broke down, to which I very impolitely told them I had been watching it for the last few days and told them they would deliver it as scheduled. Less than 30 minutes later, it was dropped off. Noisy wheel gets a greasin'.

I got the PODS because I wanted my $tuff delivered and ready to move in as soon as the house closed. The shipper for the rest of my stuff has a later shipping date.

Overall, not too bad. Higher cost and shipping times than normal due to the people geysering out of California...but the same goes for everything else.
 
Blazin

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Finally have all my engineering plans submitted to build my new home, Erosion & Control Plan, NPDES permits, Septic Permits, Storm Water Management Plan, and amended subdivision Plan. Now I get to wait another 3-4 months for them to move through committees/approvals. This ended up taking the entire summer because of people just being slammed from the housing boom earlier in the year. It seems people are starting to get on top of schedules and work.
 
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lurkingdirk

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Blazin said:
Finally have all my engineering plans submitted to build my new home, Erosion & Control Plan, NPDES permits, Septic Permits, Storm Water Management Plan, and amended subdivision Plan. Now I get to wait another 3-4 months for them to move through committees/approvals. This ended up taking the entire summer because of people just being slammed from the housing boom earlier in the year. It seems people are starting to get on top of schedules and work.
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Good luck with all of that. It always seems septic is the one that they make most difficult. Hope it all goes smoothly.
How is pricing for your build? Has it come down of late? Seems lumber pricing is coming down, though cement remains pretty high.

Edit: Lumber prices are still out of control. I know someone who was going to do a nice lumber cladding on a new house they were building, and it ended up being cheaper to wrap the building in copper. Crazy times.
 
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