*Look away Dave Ramsey enthusiasts* -- Buying Bronco with cash out home refinance?

[LarryZiegler]

Rent. It's not a bad option for most who need to get away from debt.

Rent is another form of debt, just structured into something you don’t own or control how you live. Own a house long enough and the house payment is cheaper than rent. My house payment (incl taxes and insurance) is $700/mo less than renting a comparable house in my neighborhood and I have owned this house for 10 yrs with just the minimum down payment used to acquire it

Sponsored

 

[Lab00Rat]

Rent is another form of debt, just structured into something you don’t own or control how you live. Own a house long enough and the house payment is cheaper than rent. My house payment (incl taxes and insurance) is $700/mo less than renting a comparable house in my neighborhood and I have owned this house for 10 yrs with just the minimum down payment used to acquire it

Rent is a living expense, not a debt. There is a difference.
Keep the house debt, but keep it just the house, not everything else in with the house as debt.

In this instance, selling the house because you cannot manage the debt associated with the house would break the debt slave cycle. Back to crawling if you get kneecapped.

 

[Garbone]

Rent is another form of debt, just structured into something you don’t own or control how you live. Own a house long enough and the house payment is cheaper than rent. My house payment (incl taxes and insurance) is $700/mo less than renting a comparable house in my neighborhood and I have owned this house for 10 yrs with just the minimum down payment used to acquire it

To be fair ownership is also, I just need to look at my property tax bill.

 

[LarryZiegler]

Rent is a living expense, not a debt. There is a difference.
Keep the house debt, but keep it just the house, not everything else in with the house as debt.

In this instance, selling the house because you cannot manage the debt associated with the house would break the debt slave cycle. Back to crawling if you get kneecapped.

You equated owning a house as debt.....technically, the mortgage payment is necessary debt, but as you correctly re-stated is a living expense. You have to live somewhere safe. The issue of over spending on a house is either irresponsibility, unfortunate circumstances that occur later, or a necessity because of the area you have to to live (SFBay Area, So Cal, or Seattle are good examples). In generality, if income and living situation are stable, owning is much better than renting in the long term

 

[frinesi2]

First you want to grow a mullet, now you want to refinance your house to buy a truck.

I feel like I don't even know you anymore, Nick.

 

[Lab00Rat]

You equated owning a house as debt.....technically, the mortgage payment is necessary debt, but as you correctly re-stated is a living expense. You have to live somewhere safe. The issue of over spending on a house is either irresponsibility, unfortunate circumstances that occur later, or a necessity because of the area you have to to live (SFBay Area, So Cal, or Seattle are good examples). In generality, if income and living situation are stable, owning is much better than renting in the long term

Yes, and yes. One was a suggestion to break a habitual cycle of debt rolling. The second was acknowledgment of a necessary evil kept in check. Rent is a living expense, a mortgage is a debt with a usury fee associated. Break the debt cycle. If you are working to pay off the 'necessary evil', then keep the debt; otherwise, rent and break the cycle.

 

[North7]

You equated owning a house as debt.....technically, the mortgage payment is necessary debt, but as you correctly re-stated is a living expense. You have to live somewhere safe. The issue of over spending on a house is either irresponsibility, unfortunate circumstances that occur later, or a necessity because of the area you have to to live (SFBay Area, So Cal, or Seattle are good examples). In generality, if income and living situation are stable, owning is much better than renting in the long term

Sold my SoCal home and now my Texas home is free and clear, except the property taxes.

 

[zaki]

Buy the Bronco with your money.
Don’t let the bank buy it through the equity you have in your home.

 

[LarryZiegler]

Sold my SoCal home and now my Texas home is free and clear, except the property taxes.

From what we have heard, the Tx prop taxes are much higher than Calif (I’d trade the current house payment for no payment and a higher tax payment though)

 

[zaki]

From what we have heard, the Tx prop taxes are much higher than Calif (I’d trade the current house payment for no payment and a higher tax payment though)

Especially since property values are much lower for an equivalent property and the tax on it therefore lower in amount.

 

[Dmk08]

I last week got 2.3% for 60 on a 3 year old used car through my CU.

Your interest rate on your refi would likely be lower if you did a rate and term refi to remove PMI vs a cash out.

 

[North7]

From what we have heard, the Tx prop taxes are much higher than Calif (I’d trade the current house payment for no payment and a higher tax payment though)

Yes they are but I would never trade the quality of life here for California, and yes I lived there for many years. But wait until Prop 13 gets voted out and your California taxes are going to double, or more.

Now the Texas humidity, that I could do without, especially without Bronco seat perf holes and cooling fans.

 

[Lab00Rat]

From what we have heard, the Tx prop taxes are much higher than Calif (I’d trade the current house payment for no payment and a higher tax payment though)

Sorry to come off as 'judgy', but I did exactly what the OP is suggesting (not for the Bronco). It put me 10 years behind in my mortgage and I had to eventually refi to cover the additional debt and start over at 30 years for the original value of the house. It was not good, but a wakeup moment to realize I was doing it all wrong. I paid of the mortgage as fast as I could and now I'm in a good spot to buy a new truck next year. I want the best for everyone, even if it's the hard thing to do.

 

[North7]

Especially since property values are much lower for an equivalent property and the tax on it therefore lower in amount.

Boy you have bad info, my property taxes are twice what they were in California. Look up the cost of homes in the Dallas area, try Frisco or Prosper for pricing, and no SFBay does not count since they are stupid overpriced. Prices keep going up because all the California companies are moving here, Toyota and many others.

 

[zaki]

Boy you have bad info, my property taxes are twice what they were in California. Look up the cost of homes in the Dallas area, try Frisco or Prosper for pricing, and no SFBay does not count since they are stupid overpriced. Prices keep going up because all the California companies are moving here, Toyota and many others.

Of course if your home costs as much as your home in California your property taxes in Texas would be higher ?

Your home in Texas would have to be about half the price of your home in CA to have an approximately equal property tax.

Sponsored