Who uses credit cards?

Zippyjuan said:
Your reply supports what I said- thanks.
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No. You said, "there are other factors in determining rents. But rents will not be below the landlord's costs or he will not rent it out" That is not the case.

To repeat: The only thing determing the price of rent is what renters are willing to pay. The landlord's costs have nothing to do with it.
 
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timosman said:
Even if you "buy" a house, you still need to pay for the privilege of living in it. The property tax is usually over 1% of the value per annum. Check your county tax regulations.
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One percent for primary residence for me , where I really get skinned is the others .
 
oyarde said:
One percent for primary residence for me , where I really get skinned is the others .
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You are playing the game they told you to play. You could have used the money to start a business. Is being a landlord so much fun ?
 
I see a lot of idealism here that I agree with and have for 7 years, but now I am thinking about reality. Its not as easy as "save up for it like the old days" because the debt industry has inflated the hell out of everything. To live in a city, you need to drop at least $100,000 to $200,000. Now, living in a rural area or buying land or leasing land and building on it is obviously cheaper, but I dont foresee an interest in doing that any time soon. Also, I can scrimp and save for 30 years and finally at 50, own a house. For what? I might be dead 30 years later. Alternatively, I can take out a mortgage in the next 5-10 years and have my own house and in 30 years, own it outright (property taxes aside).

Unfortunately, we live in a system of debt and to have any reasonable existence, you have to join the party. I know I can handle and manage it well, so I think its worth considering. Enjoy it while it lasts, ride the fall, and prepare for it (maybe in that rural outpost).
 
juvanya said:
I see a lot of idealism here that I agree with and have for 7 years, but now I am thinking about reality. Its not as easy as "save up for it like the old days" because the debt industry has inflated the hell out of everything. To live in a city, you need to drop at least $100,000 to $200,000. Now, living in a rural area or buying land or leasing land and building on it is obviously cheaper, but I dont foresee an interest in doing that any time soon. Also, I can scrimp and save for 30 years and finally at 50, own a house. For what? I might be dead 30 years later. Alternatively, I can take out a mortgage in the next 5-10 years and have my own house and in 30 years, own it outright (property taxes aside).



Unfortunately, we live in a system of debt and to have any reasonable existence, you have to join the party. I know I can handle and manage it well, so I think its worth considering. Enjoy it while it lasts, ride the fall, and prepare for it (maybe in that rural outpost).
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Like I said - take out a mortgage on an income producing property. A small apartment building or a duplex. Then let your tenants pay your rent.
 
juvanya said:
Unfortunately, we live in a system of debt and to have any reasonable existence, you have to join the party. I know I can handle and manage it well, so I think its worth considering. Enjoy it while it lasts, ride the fall, and prepare for it (maybe in that rural outpost).
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Borrow $120,000 at 5% pay it back over 30 years. That will cost you about $232,000.00. Managing debt well?
 
Jamesiv1 said:
Having credit cards and paying them off every month does nothing for your FICO score. FICO wants to see how you pay off a substantial amount of accumulated debt (credit cards, department stores, etc), and/or long-term debt (car or house). Borrowing money for less than 30 days says nothing about your credit risk.

I'm the credit card issuer. I make money by loaning you money. You keep an average monthly balance of $10,000 in credit at an annual APR of 13% and pay all your payments on time. Dude, I'm going to bump your limit to $20 grand and offer you a FREE bag of blowpops if you use it all up!


edit: Oh, and I'm going to have to bump your interest rate to 15.5% because, you know... the prime went up.

double edit: FICO score = "Please, please loan me more money so I can buy stuff to impress neighbors I don't even like, and so I can buy my kids a bunch of plastic stuff so they won't have self-esteem issues!!!"
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This is inescapably wrong. I have an 800 FICO score. I haven't had a monthly balance in years, as I pay everything immediately after purchasing. No car or home loan.
 
angelatc said:
Borrow $120,000 at 5% pay it back over 30 years. That will cost you about $232,000.00. Managing debt well?
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What are the opportunity costs- what else can you do with that money? You could not borrow money and use the funds which could have gone towards buying a home and gave it away to a landlord to rent a place and get nothing besides a roof over your head. Or you can use that money to pay off the loan and acquire an asset you can sell for some or even all of the money you spent on the loan (depending on what housing prices do). Then when it is paid off, your costs of living drop significantly. Or you can keep paying rent and get nothing. Which gives you the highest return in the long run? Zero in 30 years? Or a valuable asset plus lower cost of living in 30 years?

Me- I am enjoying the extra money I now have every month. (I actually paid mine off in under 15 years).
 
Start with a smaller home like a condo, before you take the plunge with a large home. In many situations you are actually paying less for the mortgage per month than you would pay for renting the same exact property. If mortgage rates are only 3 to 5% over 30 to 40 years, it makes a lot more sense to mortgage a home. Owning a home will build equity in the long run which you can use as leverage to get other loans. Also put 20% down or more on the mortgage, you will pay it of a lot sooner with much less interest costs.

Some credit card info, you need at least 2 or more cards to establish good credit. Don't ever close an account, it will hurt your credit in the long run, just cut the card up when you pay off the full amount. Don't max out cards, stay around 30% of the max limit. Never pay just the minimum amount per month, this will also hurt your credit. Pay about 20% more than what is required. This will save you a lot of heartache.
 
Mine is worth more than twice what I paid for it. Or I could be paying rent- higher rent than I would have been paying when I bought the place. A mortgage locks in your payments. Rents can (and often do) go up over time.
 
juvanya said:
I see a lot of idealism here ... but now I am thinking about reality.

Its not as easy as "save up for it like the old days"

To live in a city, you need to drop at least $100,000 to $200,000.

I can scrimp and save for 30 years and finally at 50, own a house. For what? I might be dead 30 years later.
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You have made up your mind. So why ask us?

I already told you there's a different way. A road less traveled. A short circuit. I can tell you about it if you like. But do you want to hear it? Or are you already convinced you're trapped and don't want to hear anything contradicting your theory?

Mortgage might be right for you. Or it might not. But you shouldn't take one out because you're feeling trapped and giving up and think there's no other choice. That's the way to make bad decisions, IMHO. If you get one, it should be because you love the idea and have carefully considered the long-term consequences and with eyes wide open decided "the benefits way out-weigh the costs, this does not violate my values, and this is going to be fantastic." Do it from a position of empowerment, not defeat. Otherwise, you will regret it, guaranteed.
 
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Zippyjuan said:
Mine is worth more than twice what I paid for it. Or I could be paying rent- higher rent than I would have been paying when I bought the place. A mortgage locks in your payments. Rents can (and often do) go up over time.
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Zippy, why don't you take financial advice and shove it where the sun don't shine ? Next you will tell us real estate prices always go up.
 
You are free to accept or reject anything you read on the forum- by me or anybody else. Perhaps you can share some suggestions on the topic? Which you think would be better and why? Owning is certainly not for everybody but it has worked extremely well for me. I can't promise it will work for you or anybody else. Do you suggest staying a renter? Does that improve ones financial situation in the future?
 
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Zippyjuan said:
You are free to accept or reject anything you read on the forum- by me or anybody else. Perhaps you can share some suggestions on the topic? Which you think would be better and why? Owning is certainly not for everybody but it has worked extremely well for me. I can't promise it will work for you or anybody else.
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Nobody believes you own anything. Maybe a flesh light - http://www.fleshlight.com/
 
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