Reply to What Age Should You Buy By?

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[quote=Anonymous][quote=Anonymous][quote=Anonymous]The property ladder is a trap. You just get bigger houses bigger mortgages, never get it paid off. 
Buy a house where you want to live. Don't trade up to a huge place with  a crappy commute.[/quote]

That's not necessarily true. Eg buy house for 500k (at 6% interest rate) with 10% down. appreciated to 800k after 10 years. assume inflation rate was 3%, and real appreciation rate on house was basically zero. After 10 year period, the balance on loan would be 376k. Equity net of sale costs would be 250k. So now i can turn around and buy a 900k house using equity from previous house and borrow 650k, which is a 464k loan adjusted for inflation. The person can buy a new house that is almost 30% more expense after inflation adjustment with a similar mortgage balance as their first house they bought. [/quote]

Yeah, but all the other houses have also appreciated at similar rates, including what you want to turn around and buy. I'm team buy-a-house-if-it-works-for-you, and it's very much worked for me so far. I just traded up from my starter house after seven years, having doubled my down payment thanks to appreciation. But it's not the only sane choice and it does have drawbacks. [/quote]

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