Do you think mortgages are worth it? Are they a big rip off?
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Do you think mortgages are worth it? Are they a big rip off?
To honestly answer you, it’s a two way thing. It only depends on how see it personally. A traditional mortgage company or bank does not rip you off. They facilitate a path toward home ownership. It’s a given that they will make money on lending you money. A traditional 30 year mortgage helps most people get into a home they will love. But by the end of thirty years, you may have paid the mortgage company as much as double the price you originally paid for the house. Still, in most cases, it’s cheaper than renting.
I think you’re looking at it the wrong way. Getting a mortgage on a house is exactly a leveraged investment in that house, where the yield is the increase in the house’s value plus dividends realized as rent. If you can assign monetary value to the peace of mind of owning a house, or not being in debt, factor that in, but I think that if you internalize that a house is nothing more than an asset, you should be mostly unfazed by either. A lot of people feel just like you, they don’t know where they want to be in 5 years if they will still have the same job, be married, want to live in the same city etc. that’s why if making a long term investment like a mortgage is possible for you it can give you a big step up.