{"items": [{"author": "Scott", "source_link": "https://www.facebook.com/notes/jeff-kaufman/sunday-august-22-2010-should-we-buy-a-house/420891926212/?comment_id=420900011212", "anchor": "fb-420900011212", "service": "fb", "text": "A house will lock you down in one place. Do you want to stay where you are for the rest of your lives?
If you know the answer is \"yes\" (and you are certain about your finances), buy the house.
However, if there is any chance that you might need/want to move to another area, the house will be a major burden on you. House prices are lower than they were five years ago, but they are still high compared to historical figures. They could easily fall farther. Selling later on could be difficult without taking a loss. Even if prices do go up, getting rid of the house will be a major pain.
Personally, I would say don't buy the house. Life is too uncertain at this stage to lock yourself down like that.", "timestamp": "1282499391"}, {"author": "Michael", "source_link": "https://www.facebook.com/notes/jeff-kaufman/sunday-august-22-2010-should-we-buy-a-house/420891926212/?comment_id=420907161212", "anchor": "fb-420907161212", "service": "fb", "text": "Retirees won't have to sell their houses to have money after retirement as long as reverse mortgages are available. The foreclosure debacle is a much larger factor, and it's very hard to know if we'll keep allowing foreclosures to climb.
To minimize interest paid, and to hedge against dropping house values, look at a 15-year mortgage instead of 30.", "timestamp": "1282500810"}, {"author": "Victor", "source_link": "https://www.facebook.com/notes/jeff-kaufman/sunday-august-22-2010-should-we-buy-a-house/420891926212/?comment_id=420970586212", "anchor": "fb-420970586212", "service": "fb", "text": "I wouldn't think of \"rest of your lives\"-five years is probably reasonable.
It doesn't truly lock you into one place-you can even move away and rent the house-you'd make a delightful landlord.
On the related issue, I've been curious about how you decided that 50% is the amount you want to give away, and to whom do you give it.
We should chat sometime-as in face to face.", "timestamp": "1282513882"}, {"author": "Jeff Kaufman", "source_link": "https://www.facebook.com/notes/jeff-kaufman/sunday-august-22-2010-should-we-buy-a-house/420891926212/?comment_id=420983271212", "anchor": "fb-420983271212", "service": "fb", "text": "@Victor: I don't know how to decide how much to give away. We currently give to oxfam, but we're considering giving somewhere else that focuses less on disaster relief and more on development; I'm not sure. Talking in person would be good.", "timestamp": "1282517071"}, {"author": "Jeff Kaufman", "source_link": "https://www.facebook.com/notes/jeff-kaufman/sunday-august-22-2010-should-we-buy-a-house/420891926212/?comment_id=420984121212", "anchor": "fb-420984121212", "service": "fb", "text": "@Scott: we're pretty sure we want to stay in the boston area long term. We're less sure about whether we'd stay in the house for as long as we own it, but as victor says, renting it out is an option. Julia's parents bought a house to rent out when they were about our age and they think it's a pretty reasonable thing to do.", "timestamp": "1282517266"}, {"author": "Jeff Kaufman", "source_link": "https://www.facebook.com/notes/jeff-kaufman/sunday-august-22-2010-should-we-buy-a-house/420891926212/?comment_id=420984541212", "anchor": "fb-420984541212", "service": "fb", "text": "@Michael: I'd not been thinking about reverse mortgages as a way for retirees to get money out of houses while still living there. If they end up wanting to move somewhere warmer, though, that would still end up decreasing boston housing demand.", "timestamp": "1282517391"}, {"author": "Michael", "source_link": "https://www.facebook.com/notes/jeff-kaufman/sunday-august-22-2010-should-we-buy-a-house/420891926212/?comment_id=421025916212", "anchor": "fb-421025916212", "service": "fb", "text": "Sure, but that's the beauty of global warming -- you don't have to move to be somewhere warmer.", "timestamp": "1282527109"}, {"author": "Jeff Kaufman", "source_link": "https://www.facebook.com/notes/jeff-kaufman/sunday-august-22-2010-should-we-buy-a-house/420891926212/?comment_id=421029306212", "anchor": "fb-421029306212", "service": "fb", "text": "@Michael: I guess we should buy a place on a hill.", "timestamp": "1282527834"}, {"author": "Julia", "source_link": "https://www.facebook.com/notes/jeff-kaufman/sunday-august-22-2010-should-we-buy-a-house/420891926212/?comment_id=421030891212", "anchor": "fb-421030891212", "service": "fb", "text": "@Michael: I understand that a shorter mortgage means we pay less interest, but how does a 15-year mortgage hedge against dropping house values?", "timestamp": "1282528258"}, {"author": "Mitch", "source_link": "https://www.facebook.com/notes/jeff-kaufman/sunday-august-22-2010-should-we-buy-a-house/420891926212/?comment_id=421082091212", "anchor": "fb-421082091212", "service": "fb", "text": "There are 3 things that you need to know when buying a house:
1. Local Morris team?
2. Local Morris team?
3. Local Morris team?", "timestamp": "1282539390"}, {"author": "BDan", "source_link": "https://www.facebook.com/notes/jeff-kaufman/sunday-august-22-2010-should-we-buy-a-house/420891926212/?comment_id=421089486212", "anchor": "fb-421089486212", "service": "fb", "text": "I've heard a rule of thumb that buying is cheaper than renting if you plan to keep the house at least seven years. That's going to vary based on interest rates and relative prices of purchasing versus renting equivalent properties, but the point is that closing costs are expensive, so you want to be pretty sure that you're going to own it for a while.
The big problem with dropping house values is when you want to sell the house and still owe more on the mortgage than you can get for the house. So a shorter term mortgage lets you owe less faster, and thus get out of the danger zone sooner. Of course, it also reduces what you can afford at a given income level.
It might pay to look at some mortgage calculators to come up with actual numbers for what you would be able to afford, and compare to prices around here. Don't forget that you want at least a 20% downpayment (which might mean reducing your giving for a while before you actually buy the house to save up).", "timestamp": "1282541799"}, {"author": "Chloe", "source_link": "https://www.facebook.com/notes/jeff-kaufman/sunday-august-22-2010-should-we-buy-a-house/420891926212/?comment_id=421093096212", "anchor": "fb-421093096212", "service": "fb", "text": "Rick and I are thinking about similar things these days. I have heard 5-7 years as the length of time you should be planning to stay living in the house. If you can additionally afford to make energy savings investments in the house it can pay off very reliably in utility savings. This is something you can't do when renting. You could put insulation in the walls, put in new windows, furnace (if needed), etc. for energy savings. Also, if you're purposeful about how you garden you can save a lot of money on food. So, you could factor those things into the financial equation when you're thinking it through. Also, it's ok to factor in your happiness and life satisfaction a little bit when considering whether or not to purchase a home, not just the financial part.
That being said, I'm still not sure whether we're going to buy or keep renting here! Good luck.", "timestamp": "1282543246"}, {"author": "Chloe", "source_link": "https://www.facebook.com/notes/jeff-kaufman/sunday-august-22-2010-should-we-buy-a-house/420891926212/?comment_id=421093256212", "anchor": "fb-421093256212", "service": "fb", "text": "http://www.greenandsave.com/master_roi_table.html", "timestamp": "1282543300"}, {"author": "BDan", "source_link": "https://www.facebook.com/notes/jeff-kaufman/sunday-august-22-2010-should-we-buy-a-house/420891926212/?comment_id=421097161212", "anchor": "fb-421097161212", "service": "fb", "text": "Chloe, that looks like a very useful chart, though I'm not sure about their methodology -- in some cases the cost seems to be versus doing nothing, whereas in other cases it seems to be versus purchasing a less efficient but otherwise equivalent product. I've heard from other sources that insulating walls is much more cost effective than replacing windows, at least if you already have storms, for example.", "timestamp": "1282544680"}, {"author": "Rick", "source_link": "https://www.facebook.com/notes/jeff-kaufman/sunday-august-22-2010-should-we-buy-a-house/420891926212/?comment_id=421143031212", "anchor": "fb-421143031212", "service": "fb", "text": "When I owned a house in Boston I replaced the windows and it was soo much nicer. They went up and down like a dream, tilted out for cleaning, and no drafts!", "timestamp": "1282563477"}, {"author": "Jeff Kaufman", "source_link": "https://www.facebook.com/notes/jeff-kaufman/sunday-august-22-2010-should-we-buy-a-house/420891926212/?comment_id=421175451212", "anchor": "fb-421175451212", "service": "fb", "text": "\"\"\"
The big problem with dropping house values is when you want to sell the house and still owe more on the mortgage than you can get for the house. So a shorter term mortgage lets you owe less faster, and thus get out of the danger zone sooner.
\"\"\"
Wouldn't getting a 30 year mortgage and putting the difference in monthly payments between that and a 15 year one into savings of some kind do this just as well?", "timestamp": "1282573040"}, {"author": "Jeff Kaufman", "source_link": "https://www.facebook.com/notes/jeff-kaufman/sunday-august-22-2010-should-we-buy-a-house/420891926212/?comment_id=421176771212", "anchor": "fb-421176771212", "service": "fb", "text": "@Chloe: the \"green and save\" table appears to get the 10 year savings by multiplying the yearly savings by 10. As some things wear out or need to be redone (does a \"heating system tuneup\" stay just as effective for 10 years?) the 10 year savings column numbers are probably high.", "timestamp": "1282573433"}, {"author": "Jeff Kaufman", "source_link": "https://www.facebook.com/notes/jeff-kaufman/sunday-august-22-2010-should-we-buy-a-house/420891926212/?comment_id=421184796212", "anchor": "fb-421184796212", "service": "fb", "text": "@Chloe: looking more at the table, many of these aren't specific to owning. Assuming we pay our own utility bills and have a reasonable landlord, categorizing the most effective ones:
Programmable Thermostat -- their savings seem to be based on assuming significant heating and cooling. We'd be not using AC and heating to 62 regardless of renting/owning. Heating to 55 at night would save some money/energy, but I doubt as much as they indicate. If it did turn out to make sense, it might be possible to convince the landlord to let us pay to replace the thermostat.
Standby Power Reduction -- we're very good about turning things off when we're not using them, so I'm not sure what this would affect. Further, this looks like you can mostly do it with power strips, which doesn't require owning.
Compact Fluorescent Lighting -- we already use CFLs in our apartment
Hot Water Heater 'Blanket' -- might be able to get landlord to let us put on
Shower Heads -- we can put these on even in an apartment
Heating System Tune up -- might be able to get landlord to do it, might be able to pay to have it done, might not be able to do it in an apartment.
Seal Duct Leaks -- I've never lived in a house with ducts. Are they for AC? In MA we don't need AC. If they're for some kind of central heating, the kinds of buildings julia likes means we're more likely to be in a place with radiators.
Dishwasher -- Probably only if we were owning. Their numbers assume we're already replacing the dishwasher, though, so I'm not sure it's as good as it claims.
Water Filters -- assumes we're buying bottled water, but we drink tap water.
Water Efficient Toilets -- our apartment already has one; unclear whether a different apartment would have one.", "timestamp": "1282575071"}, {"author": "Michael", "source_link": "https://www.facebook.com/notes/jeff-kaufman/sunday-august-22-2010-should-we-buy-a-house/420891926212/?comment_id=421188506212", "anchor": "fb-421188506212", "service": "fb", "text": "@Julia: The shorter term mortgage has more of your monthly payment going toward principal instead of interest much sooner, which means you're reducing the balance on your mortgage faster. That gives you a better chance of keeping your mortgage balance less than your house value in a declining market. It's also usually a slightly lower interest rate, which helps the situation further and provides the difference between a 15-year mortgage and Jeff's suggestion of getting a 30-year mortgage and putting the difference in monthly payments into savings or early payments.", "timestamp": "1282575753"}]}