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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: JakeStraw who wrote (491)	8/29/2001 1:54:34 PM
From: J. P.	Read Replies (2) \| Respond to of 306849

Yea, but you're still paying the taxes and the interest on the principle, that's all basically down the drain. You save about 30% of what you spend on taxes and interest. So in the first 10 years of a 30 year mortgage you are just basically paying the juice on the loan and the taxes(if you don't pay extra above the minimum payment) and deducting that from your gross income. The deductions help, but they still dont' recoup all the losses in paid interest and taxes. Renting is still cheaper IMO on the balance. I'm not saying it's better and there's more to it (i.e. no equity build over time), but on a pure month to month cash flow basis, I believe it's cheaper to rent a comparable home than what you could mortgage. In the last 5 years people have just been lucky to have the appraised value of their home go up, not their actual paid in capital on the principal. Then they go have the place reappraised and refinance it and pull all the money out. I'm not saying it's a bad thing, but I don't always think the appraised value of homes is going to increase going forward in the near term like it's been fortunate enough to do lately...