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Old 03-29-2021, 04:23 PM   #191  
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Exactly.

You certainly get more than 2.5% (less tax savings) in your investments. If you canít, you need a good financial planner to help educate you.
I get that argument. Say if the house is $300k. I can put the 20% down and throw the other money into a Total Market ETF or something similar. If I pay in cash, I'd lose out on that potential compounding returns.

But the other side of me loves the debt-free philosophy on life (e.g., Dave Ramsey). I like not having payments to take care of each month.

Am I thinking of this correctly?
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Old 03-30-2021, 07:30 AM   #192  
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I get that argument. Say if the house is $300k. I can put the 20% down and throw the other money into a Total Market ETF or something similar. If I pay in cash, I'd lose out on that potential compounding returns.

But the other side of me loves the debt-free philosophy on life (e.g., Dave Ramsey). I like not having payments to take care of each month.

Am I thinking of this correctly?
Yes, Dave Ramsey has a very good point to get out of 18%+ high interest credit card debt (and even car debt, a depreciating asset). A house, when interest rates are this low (and an appreciating asset), is a different animal. The use of that money at say, 8% rate of return in investments is better than the 2.5% rate of return in paying down your home loan.

I look at it as you controlling your debt, and wisely using debt. Not debt controlling you.

As far as the emotional feelings, I understand the emotionally driven good feeling of owing nothing to anyone.

But consider two situations.

Someone with enough for just a down payment on a house could stay debt free by living in an apartment until they can pay cash for a house several decades down the road. Not a wise business decision.

A business wanting to expand, but having to go into debt to do it, and getting a profit from it, would wisely and prudently use debt.

Hope this provides some logical contrasting perspective on the emotional side of the brain.
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Old 03-30-2021, 05:03 PM   #193  
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Yes, Dave Ramsey has a very good point to get out of 18%+ high interest credit card debt (and even car debt, a depreciating asset). A house, when interest rates are this low (and an appreciating asset), is a different animal. The use of that money at say, 8% rate of return in investments is better than the 2.5% rate of return in paying down your home loan.

I look at it as you controlling your debt, and wisely using debt. Not debt controlling you.

As far as the emotional feelings, I understand the emotionally driven good feeling of owing nothing to anyone.

But consider two situations.

Someone with enough for just a down payment on a house could stay debt free by living in an apartment until they can pay cash for a house several decades down the road. Not a wise business decision.

A business wanting to expand, but having to go into debt to do it, and getting a profit from it, would wisely and prudently use debt.

Hope this provides some logical contrasting perspective on the emotional side of the brain.
Thank you. This gives me something to think about. I'm ready to move somewhere a little more affordable and with better weather.
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Old 05-30-2021, 12:28 AM   #194  
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Plan your income off your min guarantee and bonuses, but know that usually a lender can use your actual hours versus the min guarantee if needed. Hope that gives you a basic starting point. Let me know if you need anything else.

Fly safe!
Marty

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When you said actual hours... Is that based off of the current timecards/paystubs? What is underwriting going to look at when taking the higher pay into consideration?
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Old 05-30-2021, 08:36 AM   #195  
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Originally Posted by TransWorld View Post
Yes, Dave Ramsey has a very good point to get out of 18%+ high interest credit card debt (and even car debt, a depreciating asset). A house, when interest rates are this low (and an appreciating asset), is a different animal. The use of that money at say, 8% rate of return in investments is better than the 2.5% rate of return in paying down your home loan.

I look at it as you controlling your debt, and wisely using debt. Not debt controlling you.

As far as the emotional feelings, I understand the emotionally driven good feeling of owing nothing to anyone.

But consider two situations.

Someone with enough for just a down payment on a house could stay debt free by living in an apartment until they can pay cash for a house several decades down the road. Not a wise business decision.

A business wanting to expand, but having to go into debt to do it, and getting a profit from it, would wisely and prudently use debt.

Hope this provides some logical contrasting perspective on the emotional side of the brain.
The difference between a house and other debt is you have to live somewhere and pay for that abode. You can pay it off and build personal equity or rent and build equity for someone else. The difference in cost is not that much for like properties. In fact with todayís interest rates your monthly payment in many parts of the country is less to own than rent.
I have owned my entire airline career. Property appreciation more than covered my payments. I will retire with a brand new retirement home and a vacation home plus about 400,000 in equity left over after just selling my prior home. Had I rented I would not have two paid in full homes and 400,000 extra in the bank.
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Old 05-30-2021, 09:15 PM   #196  
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When you said actual hours... Is that based off of the current timecards/paystubs? What is underwriting going to look at when taking the higher pay into consideration?
The way to figure out income is the 12 month average of credit hours flown broken out times hourly, or a two year W2 average. Recent pay stubs are only used to support that on trend line but underwriting doesnít use them for overall income calculations Also, year to date needs to meet or exceed averages if using something other than minimum guarantee x hourly. Let me know if you need anything else!

Luis
[email protected]
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