Pay off car or not?

[tvguy]

Oh ok I see.

I admire your parents (and that's awesome he could save all those years) and your in-laws. At least in my area it's more of a rarity to be able to buy a house with just cash nowadays unless you want to live in the not so nice areas (meaning one with higher crime rates and I'm not trying to be mean it's just the truth) or made a killing at selling your current home.

I live in Sacramento County, a full one-third of all home sales here the past 3 years have been cash. I don't know how people do that these days.

 

[Mackenzie Click-Mickelson]

I live in Sacramento County, a full one-third of all home sales here the past 3 years have been cash. I don't know how people do that these days.

When I worked in the insurance industry (just a couple years I left) I was always astonished at how CA works. For as many people as I saw pay cash for their homes I saw people paying a few hundred grand as a down payment and then getting a loan for $500,000-$1,500,000 .

I talked to an agent (I worked in the auto/home insurance part) in Northern CA along the coast and his house was 800 sq ft and was $750,000..he asked me what it was like in my area and I was like nowhere near that bad as far as the sq ft to purchase price ratio.

 

[tvguy]

When I worked in the insurance industry (just a couple years I left) I was always astonished at how CA works. For as many people as I saw pay cash for their homes I saw people paying a few hundred grand as a down payment and then getting a loan for $500,000-$1,500,000 .

I talked to an agent (I worked in the auto/home insurance part) in Northern CA along the coast and his house was 800 sq ft and was $750,000..he asked me what it was like in my area and I was like nowhere near that bad as far as the sq ft to purchase price ratio.

My wife has family in Albion, Illinois. A nice 800 square foot house, in a great neighborhood is $18,500 there. I love that the payment on that house is $65 a month! Okay, it needs a little work, but it is amazing how low housing prices are some places http://www.zillow.com/homes/for_sal...5,-87.847024,38.169923,-88.286477_rect/10_zm/

 

[Mackenzie Click-Mickelson]

My wife has family in Albion, Illinois. A nice 800 square foot house, in a great neighborhood is $18,500 there. I love that the payment on that house is $65 a month! Okay, it needs a little work, but it is amazing how low housing prices are some places http://www.zillow.com/homes/for_sal...5,-87.847024,38.169923,-88.286477_rect/10_zm/

wow that's some great pricing for that house even with a little tlc needed and with that payment each month, I'd love that too.

 

[kreckl]

I want to buy that house!

 

[OmegaxWk]

Omg that house!!!!

 

[DawnM]

I guess it depends on what you mean by a great neighborhood.

You can get a house here for under $50K, and the area isn't necessarily dangerous but the schools are not where I would send my kids and the neighbors don't keep up their yards, have multiple cars that may or may not run, in their yard, etc....

If you want anything in an area where people keep up their yards, you would feel ok sending your kids to the local school, and you still want inexpensive, you would need to go over $100K and either live in a very small house with very little yard, OR live quite far out in the country areas. But, the good thing is that it CAN be done. That is one reason we moved from SoCal, so that our kids would be able to afford staying if they chose to stay in the area.

As our kids reach college age, we have even considered buying a condo/townhouse near the campus of our local Univ. for them to live in because the mortgage would be close to renting and we could use it as an investment or rent it out later. And it is still affordable! No way we could have done that at one of the local UC schools for them!

 

[tvguy]

I guess it depends on what you mean by a great neighborhood.

You can get a house here for under $50K, and the area isn't necessarily dangerous but the schools are not where I would send my kids and the neighbors don't keep up their yards, have multiple cars that may or may not run, in their yard, etc....

If you want anything in an area where people keep up their yards, you would feel ok sending your kids to the local school, and you still want inexpensive, you would need to go over $100K and either live in a very small house with very little yard, OR live quite far out in the country areas. But, the good thing is that it CAN be done. That is one reason we moved from SoCal, so that our kids would be able to afford staying if they chose to stay in the area.

As our kids reach college age, we have even considered buying a condo/townhouse near the campus of our local Univ. for them to live in because the mortgage would be close to renting and we could use it as an investment or rent it out later. And it is still affordable! No way we could have done that at one of the local UC schools for them!

Albion is a lot like Mayberry on the Andy Griffith show. Doesn't matter where you live, all the kids go to the same Elementary, Middle, and High Schools. Official population is 1,975. Not sure there are many, if any $100,000 homes. I'm sure there are a few seedy people there, not sure there is an entire seedy neighborhood though.

 

[DawnM]

Albion is a lot like Mayberry on the Andy Griffith show. Doesn't matter where you live, all the kids go to the same Elementary, Middle, and High Schools. Official population is 1,975. Not sure there are many, if any $100,000 homes. I'm sure there are a few seedy people there, not sure there is an entire seedy neighborhood though.

But the ratings were not stellar. 5 out of 10, 6 out of 10. 82% graduation rate. They are mediocre.

City-data says the median income is $32K, per capita income is $18K, so I would also assume this is a blue collar town with low incomes.

 

[tvguy]

But the ratings were not stellar. 5 out of 10, 6 out of 10. 82% graduation rate. They are mediocre.

City-data says the median income is $32K, per capita income is $18K, so I would also assume this is a blue collar town with low incomes.

Champion spark plug and filter is the big employer. I presume those workers are union and well compensated. Otherwise yes, I would suspect blue collar, with a LOT of retirees living on fixed incomes. A lot of folks from Chicago with nice pensions seem to be drawn to this town. Like I said, a lot like Mayberry. $32,000 median income is pretty good. Median income of Sacramento is $53,000, and that house would cost you close to $200,000 here.

 

[wulfgeat]

Other than an emergency fund of 6 months living expenses and retirement savings, I would not leave a lot of money in the bank while making a house note. I would pay more on the house out of that.

 

[ronandannette]

wow that's some great pricing for that house even with a little tlc needed and with that payment each month, I'd love that too.

I want to buy that house!

Omg that house!!!!

I guess it's all a matter of expectation - I grew up in a farmhouse quite similar to that one, which had been built when my great-grandparents pioneered our region in 1900. Even with 10's of 1,000's of dollars worth of renovation and improvement over more than a century, it still actually detracted from the property value when we finally sold the farm. Based on the zillow ad, I can't imagine anybody doing anything with that house except knocking it down and building a new one.

 

[DawnM]

I guess it's all a matter of expectation - I grew up in a farmhouse quite similar to that one, which had been built when my great-grandparents pioneered our region in 1900. Even with 10's of 1,000's of dollars worth of renovation and improvement over more than a century, it still actually detracted from the property value when we finally sold the farm. Based on the zillow ad, I can't imagine anybody doing anything with that house except knocking it down and building a new one.

Unless they actually only make $32K, then there is no way to afford that.

 

[Mackenzie Click-Mickelson]

I guess it's all a matter of expectation - I grew up in a farmhouse quite similar to that one, which had been built when my great-grandparents pioneered our region in 1900. Even with 10's of 1,000's of dollars worth of renovation and improvement over more than a century, it still actually detracted from the property value when we finally sold the farm. Based on the zillow ad, I can't imagine anybody doing anything with that house except knocking it down and building a new one.

Well there is a point where certain homes are like that. True farmhouses and victorian type homes come to mind where certain alterations are undesirable and take away from the charm and essense of the home it's where the fine line has to be walked with breathing fresh life into the home and not turning it into a shell of what it was meant to be.

 

[tvguy]

I guess it's all a matter of expectation - I grew up in a farmhouse quite similar to that one, which had been built when my great-grandparents pioneered our region in 1900. Even with 10's of 1,000's of dollars worth of renovation and improvement over more than a century, it still actually detracted from the property value when we finally sold the farm. Based on the zillow ad, I can't imagine anybody doing anything with that house except knocking it down and building a new one.

Why on earth would they knock it down? Starting from scratch probably would cost you most than a house is worth in Albion. That's the case in a lot of small towns. The cost of construction exceeds what homes sell for.

 

[ronandannette]

Why on earth would they knock it down? Starting from scratch probably would cost you most than a house is worth in Albion. That's the case in a lot of small towns. The cost of construction exceeds what homes sell for.

To put something much nicer, more modern and functional on what appears to be a nice little piece of property? I don't know why anybody would put 1 cent into a reno...

 

[tvguy]

To put something much nicer, more modern and functional on what appears to be a nice little piece of property? I don't know why anybody would put 1 cent into a reno...

I do. The cost of the reno added to the purchase price of the existing house adds up to less than, or equal to what the market value of the house is. Plus, you may be able to afford the house and reno without a loan.
The cost of new construction, added onto the purchase price of the existing house adds up to more than the market value of the house. True, if you plan to stay there forever, probably not an issue. And banks won't lend more money than the final market value, so you would have to do it all in cash.

 

[kymom99]

I do. The cost of the reno added to the purchase price of the existing house adds up to less than, or equal to what the market value of the house is. Plus, you may be able to afford the house and reno without a loan.
The cost of new construction, added onto the purchase price of the existing house adds up to more than the market value of the house. True, if you plan to stay there forever, probably not an issue. And banks won't lend more money than the final market value, so you would have to do it all in cash.

We ran into this with my parents property. The house was built in the 50s. Damp basement, poor insulation. Sitting on a double lot surrounded by homes going for 300k-1 million. The house and land are valued at 150k. We thought it would be appraised for a lot more but not so. That meant anyone wanting to build on it would have to pay the difference of what we thought it was worth, based on lot prices adjacent to it. Also, the cost of razing the house would have to be considered. It's not as easy as it seems. I ended up buying the house, which I lived in all my life until I moved out on my own. Much more space than I had before and in a very desirable area. The good outweighs the bad

 

[tvguy]

We ran into this with my parents property. The house was built in the 50s. Damp basement, poor insulation. Sitting on a double lot surrounded by homes going for 300k-1 million. The house and land are valued at 150k. We thought it would be appraised for a lot more but not so. That meant anyone wanting to build on it would have to pay the difference of what we thought it was worth, based on lot prices adjacent to it. Also, the cost of razing the house would have to be considered. It's not as easy as it seems. I ended up buying the house, which I lived in all my life until I moved out on my own. Much more space than I had before and in a very desirable area. The good outweighs the bad

And at least in California, the property taxes are higher on a new house, than on a renovated existing house. I think over half of the original structure must be retained however.

 

[dmc6469]

I live in Sacramento County, a full one-third of all home sales here the past 3 years have been cash. I don't know how people do that these days.

My home!! Left the area after living there my entire life 12 years ago. I always say I want to go back but there’s no way now. The cost of living is unbelievable compared to Nashville. Once you leave Cali you just can’t go back (unless you have an insane bank account or put yourself in major debt) LOL