Reply to How much can we afford to spend on home?

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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]Put down $100k and get a $900k house at historically low interest rates.  The $100k will give you a far greater return than any other investment as the house appreciates, even if a low amount.

No brainer.  [/quote]

In the long term, housing prices stay in tune with wage inflation.  That was not the case in the 2000's, but it is factually, true.  Do NOT consider your home as an "investment."  Your money is not working for you.  You are living in your money/debt.

Perhaps read a few books from the library before making the biggest financial commitment of your life.  I mean that very  seriously.  It's SOOO easy to get swept away by beautiful finishings and fixtures.  Please read up on "The Smartest Money Book You'll Ever Read" and "Your Money Ratios."  It's a weekend's worth of your time and it will save you thousands of dollars by giving you info to make good choices.  [/quote]

You make this comment a lot, but I disagree with your statement. You may think it's a more conservative investment, but it's still an investment. And some people will do much better than others.[/quote]

You can "disagree" with what I "think" -- but your disagreement is based on nothing more than your opinion.  The data hold otherwise.  You don't have to agree with me.  That's the beauty of knowing I'm right -- I have data and the support of people with PhD's in finance and ecomonics on my side.  So I don't really care whether you agree or disagree.  Not only am I right, but I'll also be richer for it!  Living well is the best revenge.  Enjoy![/quote]

OK, so explain this to me. We bought a house in early 2009. It was $420k. The gov't gave us an $8k gift to go with it (first time homebuyer credit). Over the course of four years, we put in about $10k in improvements/repairs. We sold last year for $500k (and house is now worth $525k). We didn't pay realtor fees when we sold or closing costs when we bought, so the profit was pretty straightforward--about $80k, give or take. Our down payment was $80k, so we doubled our "investment" in less than 5 years. Even if we had paid realtor/closing cost fees (to the tune of $40k), we still would have done OK for ourselves. This is not factoring in tax breaks or anything, either.

An investment is defined as "a monetary asset purchased with the idea that the asset will provide income in the future or appreciate and be sold at a higher price." This is what we did, is it not? Maybe not everyone will have a positive outcome or realize significant gains, but investments carry risk. I know there are people in the DC area who extended themselves more and did way better than us, and people who are underwater in the Midwest. Maybe we're arguing about semantics, but I really don't understand your black-and-white viewpoint, and nobody ever calls you out on it when you trot it out on these forums.  [/quote]

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