RetroGamer87 wrote:
Do you have any idea how much the interest is on a mortgage? If you get a 30-year mortgage. Over 2/3 of that will be interest. Of that 30-years. You pay only 10 years on principal and the other 20 is interest. If you save up the money and wait. Instead of paying interest. Now you earn interest. It only took me 8-years to save the money to buy my house and 1/3 of that was interest "earned" from the bank.
Yes I'm aware but if I spend a number of years to save up to buy a house I'll be paying rent at the same time.
Let's be very optimistic and say I can save $1,000 per month. At that rate it would take me 25 years to save for a basic apartment. But at the same time, I'm paying $1,400 per month in rent. So after 25 years when I've saved up $300,000 for a basic apartment, I've also paid $420,000 in rent so I could have a place to live while I was saving. So I pay $720,000 on a $300,000 apartment. That's not much better than a mortgage.
To compound that, during this 25 years, the value of the same apartment would increase, meaning I have to save four or five hundred thousand to buy an apartment that currently costs three hundred thousand. My rent would also increase. Both of these factors would further add to the cost but a mortgage doesn't increase if the home goes up in value.[/quote]
Yep, it looks impossible for all but a few top-paid folk. That's why most home buyers get creative. If they buy a building, they rent at least half of it out. Or, they use an RV or other expedient for living. The capitalist economy will never willingly do more than keep you barely alive if you are hard to replace.