I don’t understand how my neighbors are paying for their renovation

[Anonymous]

You are extremely jealous. How does this affect your life? Are you bored or something?


Why can’t you chalk it up to family money?


Why is this unbelievable to you?


Is this family white or other race?

[Anonymous]

Is this is what life is all about, worrying about others money that is not yours?

You taking this to the grave?

[Anonymous]

Dh and I both have very comfortable families and even we wonder how people afford things sometimes. I think it’s natural.

The answer in this case is that they were gifted a house and had no mortgage. They could have easily taken out a loan for construction or sold equity in the house for a loan. Or additional family gifts.

[Anonymous]

Anonymous wrote:If everyone MYOB there would be purpose for DCUM.

Your neighbors could make significantly more than you think. My husband's job title sounds like it pays far less than it actually does and I am SAHM. Like a PP, we actually underbought.

Someone once flat out asked me how we can afford our home and not in a nice way. That was rude. In person, MYOB. But if that someone wanted to chat about us anonymously on the internet that is fine with me.

Weak logic. Here’s what, if OP posted about “how do YOU afford X, Y, or Z” and people VOLUNTEERED the information, there ya go. Asking questions, sharing opinions, information, ideas and responses, THAT is the purpose of DCUM.

Speculating and gossiping is just tacky and gross, online or offline. I said what I said. If you’re not brave enough to ask in real life, it’s probably not your business.

[Anonymous]

Anonymous wrote:

Anonymous wrote:You have no idea how people conduct themselves. My DH and I when dating at age 22 fresh out of college bought a house in Vienna woods. That was 23 years ago. We held for a long time as a rental and then bought another house. We then 1031 exchange the Vienna house and didn’t sell our 2nd home and turned that into a rental as well. After renting the 1031 for a year to keep up appearances for the IRS we moved into it that home and here we are in a home that is paid off. We do not make a ton of money but we do use what we make wisely and have never been afraid to leverage ourselves. This approach has paid off very well in this real estate market. We sit in two income producing rentals and own a primary home without a mortgage

I’m not sure why DCuM is sooo class obsessed. This is not a happy way to live your life.

Nice to have family money & no student loans!

Maybe they didn't have student loans, maybe they only had $10-15K of student loans. Either way..... they definately didn't need family money to do this. We bought our first house at 24, and that was after paying off $80K+ in student loans and waiting to have 20% down. No family money. If we hadn't had student loans, we could have purchases at 22/22.5 with 20% down. And we bought a 2200sq ft, 4 bed 2.5 bath home. Could have easily bought for 25% less a smaller home and done it 6 months earlier. If we had no student loans, could have purchases at 22 very easily and still put 20% down.

[Anonymous]

Anonymous wrote:OP here. Thanks for all the responses. I guess the answer is borrowing against a paid-off house that they were given - I hadn't thought of that. If I were gifted a paid-off house, I would just be grateful to never have a mortgage; it wouldn't be my first thought to leverage myself back to the gills just to upgrade my standard of living a little bit.

I understood your curiosity at first, but it’s becoming clearer in follow up that you’re trying to somehow convince yourself your neighbors are drowning in debt. Why? To feel better about your own home/life choices? I’m not really sure.

But a 500k loan on a 160k income is doable, especially if no student loans. And it’s entirely possible they had saved up earlier on (especially if they lived in the paid off house for a while before renovating) so maybe they only took out 350k and had 150k cash.

It is entirely possible your neighbors are about to have a newly fixed up house worth close to $1.2m + and be financially comfortable.

[Anonymous]

Anonymous wrote:For us it was Apple stock and a decade of frugality.

Not everything is about family money, far from it, but after spending years on DCUM, I've seen that people feel more comfortable thinking their neighbors benefited from family help than from their own investment decisions or their own frugality or hard work. It must make them feel better about themselves, a la "it's not my fault I can't have the same thing, this family just started out on a different rung".

DID YOU cash out your apple stock?

My neighbor brought 1000 shares of apple stock back in 2000...

[Anonymous]

Anonymous wrote:It's none of your business.

It's strange to me that you give this a moment's thought.

DP

I don’t think it is strange to wonder or ask in an anonymous forum. Maybe they want to know how to do the same. If someone said, investing or frugality was the answer, that could be helpful to know! Not everyone received a financial education from their parents.

[Anonymous]

Here’s another source of income: bonuses!

[Anonymous]

Anonymous wrote:

Anonymous wrote:OP here. Thanks for all the responses. I guess the answer is borrowing against a paid-off house that they were given - I hadn't thought of that. If I were gifted a paid-off house, I would just be grateful to never have a mortgage; it wouldn't be my first thought to leverage myself back to the gills just to upgrade my standard of living a little bit.

I understood your curiosity at first, but it’s becoming clearer in follow up that you’re trying to somehow convince yourself your neighbors are drowning in debt. Why? To feel better about your own home/life choices? I’m not really sure.

But a 500k loan on a 160k income is doable, especially if no student loans. And it’s entirely possible they had saved up earlier on (especially if they lived in the paid off house for a while before renovating) so maybe they only took out 350k and had 150k cash.

It is entirely possible your neighbors are about to have a newly fixed up house worth close to $1.2m + and be financially comfortable.

Yes. It really seems like the OP is just very jealous that her neighbors are going to be living in this beautiful house and has to convince herself that they really can't do it and are going to be karmically punished for some reason. No. We have the same HHI and a 500k loan would be doable, but more likely they had cash saved up and they have a much smaller loan.

[Anonymous]

Anonymous wrote:If everyone MYOB there would be purpose for DCUM.

Your neighbors could make significantly more than you think. My husband's job title sounds like it pays far less than it actually does and I am SAHM. Like a PP, we actually underbought.

Someone once flat out asked me how we can afford our home and not in a nice way. That was rude. In person, MYOB. But if that someone wanted to chat about us anonymously on the internet that is fine with me.

When dh and I bought a big, very nice house several of his coworkers wondered how we afforded it. Every single one of them grossly misestimated my salary. Even if they were told where I worked or what I did, almost everyone of them, all male btw, assumed I made a pittance. I had the same rude interrogations. The worst offenders were idiots about money and never saved a dime. We were frugal and they looked down on it until we could afford more house than they could.

[Anonymous]

Not a big mystery OP: they inherited a house probably fully paid for or have a super low old fashioned mortgage payment from their parents. Now they can get a mortgage style loan to do the needed renovations.

That, plus living frugally and having two incomes, would explain the whole thing.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:OP here. Thanks for all the responses. I guess the answer is borrowing against a paid-off house that they were given - I hadn't thought of that. If I were gifted a paid-off house, I would just be grateful to never have a mortgage; it wouldn't be my first thought to leverage myself back to the gills just to upgrade my standard of living a little bit.

I understood your curiosity at first, but it’s becoming clearer in follow up that you’re trying to somehow convince yourself your neighbors are drowning in debt. Why? To feel better about your own home/life choices? I’m not really sure.

But a 500k loan on a 160k income is doable, especially if no student loans. And it’s entirely possible they had saved up earlier on (especially if they lived in the paid off house for a while before renovating) so maybe they only took out 350k and had 150k cash.

It is entirely possible your neighbors are about to have a newly fixed up house worth close to $1.2m + and be financially comfortable.

Yes. It really seems like the OP is just very jealous that her neighbors are going to be living in this beautiful house and has to convince herself that they really can't do it and are going to be karmically punished for some reason. No. We have the same HHI and a 500k loan would be doable, but more likely they had cash saved up and they have a much smaller loan.

OP here. I’m not jealous at all. As mentioned, I didn’t even think about the fact that they would borrow against an inherited, paid-off house because it’s not something I would do. I actually have lots of untapped equity and could do the exact same thing if I wanted to.

I’m just surprised that they did this because, as I mentioned, this is not a Bethesda
sh*tshack and their $900,000 house was nice enough before the renovation. The renovation is a want — not a need — and I wouldn’t want to go into debt for 30 years for something like that. But that doesn’t mean I don’t think they can afford a $500-600K mortgage or that I’m jealous. Different strokes for different folks.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:OP here. Thanks for all the responses. I guess the answer is borrowing against a paid-off house that they were given - I hadn't thought of that. If I were gifted a paid-off house, I would just be grateful to never have a mortgage; it wouldn't be my first thought to leverage myself back to the gills just to upgrade my standard of living a little bit.

I understood your curiosity at first, but it’s becoming clearer in follow up that you’re trying to somehow convince yourself your neighbors are drowning in debt. Why? To feel better about your own home/life choices? I’m not really sure.

But a 500k loan on a 160k income is doable, especially if no student loans. And it’s entirely possible they had saved up earlier on (especially if they lived in the paid off house for a while before renovating) so maybe they only took out 350k and had 150k cash.

It is entirely possible your neighbors are about to have a newly fixed up house worth close to $1.2m + and be financially comfortable.

Yes. It really seems like the OP is just very jealous that her neighbors are going to be living in this beautiful house and has to convince herself that they really can't do it and are going to be karmically punished for some reason. No. We have the same HHI and a 500k loan would be doable, but more likely they had cash saved up and they have a much smaller loan.

OP here. I’m not jealous at all. As mentioned, I didn’t even think about the fact that they would borrow against an inherited, paid-off house because it’s not something I would do. I actually have lots of untapped equity and could do the exact same thing if I wanted to.

I’m just surprised that they did this because, as I mentioned, this is not a Bethesda
sh*tshack and their $900,000 house was nice enough before the renovation. The renovation is a want — not a need — and I wouldn’t want to go into debt for 30 years for something like that. But that doesn’t mean I don’t think they can afford a $500-600K mortgage or that I’m jealous. Different strokes for different folks.

Why wouldn't you tap into equity to renovate your house? If you plan to sell the house and cash the equity, ok that makes sense. But, if this is your forever home, what's the point of keeping the equity tied into the house? Take some equity, renovate your house to enjoy it for the next 15 to 20 years. You would still pay it off and pass it on to your kids if you want.

[Anonymous]

A close friend of mine is renovating and a lady in our neighborhood is making a lot of comments about it.

Similar situation- the house cost about a million and my friend is doing another million in renovations. The lady in the neighborhood keeps talking about the cost, that the house was fine before, etc.

Here's the deal. My friend makes over a million a year. This is what she wants to do with her money. I know people probably think they make less because she doesn't really talk about her job and doesn't drive a flashy car. But she's got the money and this is how she wants to spend it.

So, OP. That is your answer. They have the money and this is how they want to spend it. It isn't that deep.