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by nickdoesdesign 4635 days ago
This is what gets me. The whole building equity thing by equating it to property. I have equity, but I invested it elsewhere. I still rent. You dont need to own property to have equity and to state otherwise is a disservice.

America is not all subdivisions and white picket fences...
1 comments
ars_technician 4635 days ago
You are confusing what the point of building equity in a home is. It's not solely an investment vehicle like stocks, bonds, options, commodities, etc. By building equity in a home, you are also eliminating your cost of rent.

>You dont need to own property to have equity and to state otherwise is a disservice.

Again, you do if you want your cost of housing to go towards building equity.

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nbouscal 4635 days ago
You're not eliminating your cost of rent, you're (maybe) lowering it. Whatever percentage of your housing costs go towards interest, property taxes, HOA fees, homeowner's insurance, mortgage insurance, etc. are not going towards equity. Especially early on in a mortgage, the vast majority of your housing expenses are not going towards equity. Your analysis is only correct late in a mortgage. Early in a mortgage it's entirely possible to be paying more in non-equity expenses than you would be if you were renting.
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ars_technician 4635 days ago
What you don't seem to be getting is that if you are renting, ALL of it is going towards non-equity expenses. A monthly house-payment of $2000 is still better than rent of $2000 even if 90% is going towards interest/insurance overhead.
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nickdoesdesign 4635 days ago
Ok, thats fine, but I dont spend anywhere near that amount, and I live in downtown Boston, one of the highest cost of living areas on the east coast. So, what I don't spend on a mortgage, I put into my savings and other equity assets. There is no world in which I live in that I could spend the same on a mortgage as I do in rent. I still end up financially on top renting over owning in this city. Sure, I can move, but I love the quality of life I have here, and I wont change it anytime soon.

Sure, theres equity in a house, but is that everything? Do I really need to leverage a loan against my own property to live comfortably? To send any future children to a great school? Do I need to end up so underwater with a mortgage to consider myself successful? The answer to all of these is no.

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