{"id":5886,"date":"2009-06-09T10:47:30","date_gmt":"2009-06-09T17:47:30","guid":{"rendered":"http:\/\/seattlebubble.com\/blog\/?p=5886"},"modified":"2009-06-10T00:14:20","modified_gmt":"2009-06-10T07:14:20","slug":"throwing-away-money","status":"publish","type":"post","link":"https:\/\/seattlebubble.com\/blog\/2009\/06\/09\/throwing-away-money\/","title":{"rendered":"“Throwing Away Money”"},"content":{"rendered":"

One of the reasons we would often hear people use to justify overspending on a home during the bubble was that they wanted to stop “throwing away money” on rent.<\/p>\n

I would hope that by now most people have realized how ridiculous that concept is, but I thought it might help dispel the notion if we consider a pair of hypothetical (but completely plausible) scenarios.<\/p>\n

Couple A<\/strong> is renting a 2-bedroom, 1.5-bath townhouse for $1,000 a month in Ballard. Their $1,000 pays for not only the roof over their heads, but the water\/sewer\/trash, any necessary maintenance, and access to shared facilities such as a pool, hot tub, and workout room.<\/p>\n

Over the past three years Couple A have spent around $35,000 on shelter. If they decide they want to move, it’s as easy as waiting until the lease is up and collecting their security deposit.<\/p>\n

Couple B<\/strong> decided in 2006 that they were tired of “throwing away money on rent.” They didn’t have a down payment, but that of course didn’t stop them from qualifying for a $400,000 loan on an adorable 2-bedroom, 1.5-bath Ballard craftsman. With an interest rate of 5.7%, their (PITI) payments are around $3,000. Of course, this doesn’t include any services or maintenance.<\/p>\n

Over the past three years Couple B have spent around $67,000 on mortgage interest alone, and their home is now valued at around $340,000—15% less than they paid. If they decide they want to move they have three options: Come up with about $40,000 in cash to cover the difference between their mortgage and the house’s value, convince the bank to accept a short sale, or walk away<\/a>.<\/p>\n

Now, which of these hypothetical couples seems more like they have been “throwing away money” to you?<\/p>\n","protected":false},"excerpt":{"rendered":"

One of the reasons we would often hear people use to justify overspending on a home during the bubble was that they wanted to stop “throwing away money” on rent. I would hope that by now most people have realized how ridiculous that concept is, but I thought it might help dispel the notion if…<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[206],"tags":[452,63,59,546],"coauthors":[],"class_list":["post-5886","post","type-post","status-publish","format-standard","hentry","category-features","tag-buy-vs-rent","tag-mythbusting","tag-rent","tag-throwing-away-money"],"yoast_head":"\n"Throwing Away Money" \u2022 Seattle Bubble<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/seattlebubble.com\/blog\/2009\/06\/09\/throwing-away-money\/\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:title\" content=\""Throwing Away Money" \u2022 Seattle Bubble\" \/>\n<meta name=\"twitter:description\" content=\"One of the reasons we would often hear people use to justify overspending on a home during the bubble was that they wanted to stop “throwing away money” on rent. 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