Buying on credit

I bough my flat using credit too. In the end it's going to be more expensive because of the interest I'll pay but man it's worth it! Before buying I used to pay rent and move places a lot until one day I decided I had enough. There was no point in paying rent when credit and my own place was an option. It's better to pay my credit towards my own thing than pay rent for a random place that's not even mine.

By the way, you mentioned paying triple back, that's a lot!

 

I use credit just so I can build back up my credit from a nasty split 11 years ago. Credit is ok if you know your limits and pay it back.

 

It really depends. If it's worth that overall price in 10 years, then sure, that's a great deal. Some people may have chosen to rent for a a few more years but avoided a bunch of extra expenses (like insurance, property tax, maintenance, etc) and used that additional money to be able to put down a larger downpayment, etc. It really depends on what works out best for your own financial needs.

 

I too use credit to purchase my living room set and it was double for the charging. I can say as mentioned above just know how to use your credit it can help and hurt you.

 

As long as you don't overpay for the property, a real estate loan is good debt because you own a real asset which is increasing in value. In many markets the mortgage payments are cheaper than rent, plus you build equity in the property.

On the other hand, taking out a car loan is a terrible financial move. You're paying a fixed amount per month and paying interest for an asset that is decreasing in value every month and will eventually be worth nothing. Dealers often make more off the financing than off of actually selling the car.

 

It makes sense to take out a loan to buy a place to live or a car to drive if you really need a car. Other types of loans for personal items don't make as much sense. It is better to save up the money to buy furniture rather than spending more to finance it. People will often buy new appliances on credit. While it makes sense if your washing machine dies, it doesn't make sense if you are simply upgrading or the old one can be fixed.

Whenever you are looking to make any large purchase, start putting aside some of the money for it. A larger down payment will always save you money in the long run when buying on credit. Paying more each month will also shorten the payment schedule and save you on interest charges.

 

I don't know. I've had bad experiences in the past. The percentages are very high so think twice before buying on credit I would say. Sometimes you want something really bad but I think it's best to only buy when you have the cash. My modest opinion.......

 

In some ways I am actually glad I didn't buy a house during the past 10+ years. I moved out 12 years ago, and since then two of the companies I worked for got acquired and we all lost our jobs, not to mention the housing crash of 2008 where people all over the country lost their homes and got seriously screwed. I would have been seriously screwed financially if I had to make double mortgage payments until the other place sold, not to mention how much I probably would have lost on it. Some people's houses aren't even being appraised above what they originally paid for them. The house may drop in value, but you still owe what your loan was for.

I remembered thinking at the time that it doesn't make sense at all how people were just arbitrarily asking like twice as much for their houses than what they paid for them just a few years prior. Everyone was acting like they could buy a house for $150k and turn around and sell it for $250k a few years later and be rolling in dough or something. There are small ranch houses in my are selling for like $300k (in the Cleveland area, I know it's much more expensive in places like California). That is insane, those houses used to sell for like $40k-$50k - they're not even much bigger than a two bedroom apartment.