I’d call it something like “subscription creep”. People don’t seem to feel like they’re buying stuff if it’s in monthly payments.
Satellite radio ($15), TV service ($100), internet service ($40), Cell phone ($60), land line ($30). All of a sudden, you’re making a car payment per month and couldn’t ever see dialing it back a little.
And that’s just the stuff you’re not paying interest on!!!
I make WAY more money (I mean like $35,000+ more) than people I know who have a lot more of these “necessities” than I do – or least better versions of them.
Nobody gets to see your portfolio parked on the street, though.
Doesn’t mean that it’s not still rude to “suggest” an upgrade to someone upon seeing their engagement ring. That is what I referring to as inappropriate, not that people “upgrade” them at all. Sorry I wasn’t clear on that one.
you should include property taxes and insurance. property taxes are passed on in apartment rent and the homeowner’s insurance is probably a little more than her renter’s - if she even has that (i.e. to know the true costs she has to show the net increase in expense). you’re mortgage rates are also a little low (at least for my area) and presume impecable credit and a 20% down payment. she’d need $36K* in the bank too part with at closing, in addition to the money necessary for the move and the utilties deposits. homeownership in most metro areas is almost certainly much more expensive than renting. she was only paying $700 in rent, so your $1000 mortgage plus insurance, plus taxes, plus the additional expenses of homeownership offset by a tax deduction for mortgage interest that will help to varying degrees depending on her income level will still be more than the $700 and that’s not taking into account the THIRTY-SIX–FREAKIN-GRAND she’d have to save – mostly gone are the 100% financing days given the current sub-prime mortgage crisis.
poor people seems to get eff’ed all along the way. go to a small grocery in the hood and see how much more everything else is. for one month, pay your bills in money orders and see how much that increases your expenses - then imagine doing that on a meager income.
I covered most of this in a later post. Even at only 10% down, you should be able to get a 6.5% to 7% rate these days. Maybe rates are higher in Atlanta. I don’t have a clue about that. I am not sure that buying a home with 0% down is even a good idea. I would not do it, but there might be some sound reasons to do so. I would never take a loan that was not fixed. That is a big risk, especially when the rates are already very low. You would be better off renting in my opinion.
Taxes vary by a huge amount with NJ & CA towards the top and states like WV towards the bottom at less than 10% of what NJ & CA cost.
Home insurance on a $180k home would probably be in the $400-$500 range or roughly an extra $40/month. I don’t know the PMI rates. I think on $140k in 1992 it was around $600 per year, but I just don’t remember anymore.
Jim (BTW: are you angry at me? Your post sounded angry and I have no idea what I did.)
Where the hell do you shop, VCO3? The milk at the Jewel around here (in Chicago) is about $3.30. You could find it under $3 in some places. I’ve never seen milk at any of the local stores for $5 or whatever. And how much gas fits in your tank? It costs me about $40 to fill up a Mazda. Yesterday, I managed to for $33 (12 gallons in Naperville).
Even at the local rates here, (about $3.30 a gallon), it’s just a hair under $40.
