I just sold my house, I originally bought it for $134,000, started out paying $815 a month, insurance premiums go up every year, so I was at $877 a month when I sold it. If I would of paid the full term of the 30yr mortgage, I would of ended up paying over $315,000 for a $134,000 mortgage. Compound interest is a bitch. I know exactly what your talking about Bill
If you sell it after 10 years, you will have only paid off the interest of the loan. None of the principal. To make it work (Kinda cuz you'll be paying at least double in total to what the house was originally worth and you have to assume the market is good), you have to stay a debt slave for 30 years, and still you will have to pay property taxes. So the house is NEVER really yours.
Nah, he did his math well. While bank is crushing it, he is allready paying $1500 annually less. And his loan is know quantity. In 30 years from now he will be stilly paying ~$850 montly, while his rent will be multiple times more than it is now. You are right, he is going to overpay his house by 2-2.5 times, but most of it is in "future money", which is worth less than "current money". And in the times of need he can always sell the place, and in the times of plenty he can clean the credit. Once your rent is significatly higher than interest on your credit it is always cheaper to just buy the place. You have to be able to afford it, but if you can it is cheaper.
