1/2 ton or 3/4 ton

Huntindog wrote:

ShinerBock wrote:

Huntindog wrote:

ShinerBock wrote:

Huntindog wrote:

ShinerBock wrote:

Huntindog wrote:

mich800 wrote:

IdaD wrote:
An HD truck in OP's scenario is a no brainer. It's literally more truck for the same money, and it not only works better for the current trailer but also allows for more flexibility moving forward - and the compromises in moving from a 1/2 ton to a SRW HD are minimal. I think the compromises involved in moving from a SRW HD to a dually are much more significant.

I wouldn't say it is a no brainer. Everyone has a list of priority items. If a 1/2 ton that falls into the category of towing trailer and meets the other criteria better than a larger truck why should they make a purchase that falls short in the other areas.

And I don't subscribe to the mantra here to over purchase as you may upgrade later. If that is the case everyone would purchase a 4+ bedroom home as their first house because who knows if you will have kids or the parents/in-laws need to move in later. And switching trucks is surely easier than switching houses.

Houses appreciate. Trucks depreciate.
Big difference.

While this is true, unless you paid cash, you are still likely to loose your anus because you are paying nothing but interest for the first 10 years which puts you in the negative in the grand scheme of things.

That would only be true, if you had a free place to live for those 10 years.
For us mortals, a house payment took/takes the place of a rent payment.

Same goes with a truck payment unless you get that for free.

I am about to buy my 5th truck. None of them had payments.... Point is, it is possible for many to get in that position, if they manage their finances early on.

It is MUCH more difficult to do this with a house.

At any rate, if you make payments on both a house and a truck, you will pay interest on each. The house payment is a better financial move. Houses generally increase in value. Trucks generally decrease.

The house I am in now has more than quadrupled, since 1991 when I bought it. For most of that time, the payments were less than rent.
That makes the interest I paid a moot point. That is what apreciation does

If I were to have made truck payments on 5 trucks over that same time period.... I would not have much to show for it. In fact for much of that time, I would likely have been upside down. That is what depreciation does

I am talking short term. On a $200k financed home with a 5% interest(which is a good rate and the average was 9% in 1991), you will pay $99k in interest in 10 years of ownership on top of tens of thousands in taxes that you wouldn't pay if you rent. Umm, The interest rate I started with is not the one I ended with. I refinanced (no cash out) as soon as it made sense to do so. My final rate was 3.5% for a 15 year loan. In fact, one time early on because of my aggresive prepayments, I was able to refinance into a home equity loan which happened to have a lower rate but with a higher equity requirement! The best move to make when interest rates are high, is to prepay as much as possible and avoid much of the interest.. Also, when you rent, you DO pay property taxes! It is built into the rent payment! A lot of otherwise smart people don't realize this. With inflation over the course of 10 years it will be much higher. Over the total course of the 30 year loan you will pay over $186K in interest. Again, it will be much higher in 30 years when accounting for inflation.

With inflation, $100k in 1991 is equivalent to $188k now so much of your home value did not necessarily go up. It is just a dollar is worth less now. So if you calculate for inflation, taxes paid, and interest paid, your home value would have to quadruple at the end of the 30 year note just for you to break even.

So if you financed a $100k house in 1991 at the average 9% interest, you would have paid $189k in interest. Add that to the $100k you paid and you get $289k total not including taxes. With inflation, that is the equivalent of $544k from 1991 to now. So even quadrupling the houses value will still not put you ahead.This makes no sense at all. Your loan balance does not increase with inflation. Inflation with a home loan is your friend. You pay the loan off with cheaper dollars.

I am pretty much done here. It is a rare person that will make an financial argument against home ownership....

As always, your money, your choice.

I am not making an argument against home ownership. Just because I am stating facts and numbers about something doesn't mean I am against it. I am just saying that many people don't come out on the plus side or as much on the plus side as they think when they do the math and account for all things.

A 3.5% interest rate is unheard of before 2012..
Interest rates by year
Historical home interest rates

The inflation is on the money spent on the loan and interest. The value of that will decrease and it will take more of it to buy stuff. You also have to account for the cost on money and so on.