Welcome Guest
Log In | Register )
You last visited December 5, 2016, 1:37 pm
All times shown are
Eastern Time (GMT-5:00)

Buying a house with winnings VS financing.

Topic closed. 37 replies. Last post 6 years ago by Perfecttiming2.

Page 2 of 3
51
PrintE-mailLink
time*treat's avatar - radar

United States
Member #13130
March 30, 2005
2171 Posts
Offline
Posted: October 8, 2010, 8:19 am - IP Logged

So here's the situation...you just won $2 million dollars (after taxes) and want to buy a house. Would you rather buy a house with the winnings or get a mortgage so you have more money to invest?

My thinking is that if the jackpot is really low you would be better off to invest the money and get a mortgage and pay it off in 10-20 years. If you buy a house with the winnings you won't have that much to invest it.

Would banks even approve your loan if you have money from winning the lottery?

$2 million buys a lot more house in the midwest than on either coast (that's a generalization, not an absolute), so the answer may depend on where/how you want to live.

In neo-conned Amerika, bank robs you.
Alcohol, Tobacco, and Firearms should be the name of a convenience store, not a govnoment agency.

    CutlassBob's avatar - Sphere animated2.gif
    Harrison Township Michigan
    United States
    Member #90088
    April 21, 2010
    4265 Posts
    Offline
    Posted: October 8, 2010, 8:39 am - IP Logged

    So here's the situation...you just won $2 million dollars (after taxes) and want to buy a house. Would you rather buy a house with the winnings or get a mortgage so you have more money to invest?

    My thinking is that if the jackpot is really low you would be better off to invest the money and get a mortgage and pay it off in 10-20 years. If you buy a house with the winnings you won't have that much to invest it.

    Would banks even approve your loan if you have money from winning the lottery?

    I would purchase a select parcel of land with the winnings, not to exceed $150,000.00. Next i would build my dream house, complete with above/underground secure living. My home would be 100% self sufficient, generate it's own power, gas well, water well, pump systems, ventilation systems, contained life support systems, etc. I would have a security system on my property that would make the White House Blush. All this for $500,000.00 No need for fancy vehicles, a couple Loaded Jeeps would do. Modified to my specifications.

    Start my own business and live off the profits.

    Cutla$$Bob

     "You can't handle the truth!" Nicholson.

      sully16's avatar - sharan
      Ringleader
      Michigan
      United States
      Member #81740
      October 28, 2009
      40377 Posts
      Offline
      Posted: October 8, 2010, 12:04 pm - IP Logged

      Depends on how much I win, if it's alot i'd pay cash, the banksters get enough.

      Did you exchange a walk on part in the war ?

      For a lead role in a cage?

       

                                                  From Pink Floyd's " Wish you were here"

        savagegoose's avatar - ProfilePho
        adelaide sa
        Australia
        Member #37136
        April 11, 2006
        3300 Posts
        Offline
        Posted: October 8, 2010, 12:10 pm - IP Logged

        if i won a lot, id prob lease.  i mean if someone comes climbing over my wall and hurts themselves they can sue the property owner for  damages not me.

        2014 = -1016; 2015= -1409; 2016 JAN = -106; FEB= -81; MAR= -131; APR= - 87: MAY= -91; JUN= -39; JUL=-134; AUG= -124; SEP = -123; OCT= -84  NOV=- 73 TOT= -3498

        keno historic = -2291 ; 2015= -603; 2016= JAN=-32, FEB= +12 , MAR= -86, APR = -77. MAY= -48, JUN= -29, JUL=-71; AUG = -52; SEPT= -43; OCT = +56 NOV = -33 TOT= -3297

          Avatar
          NASHVILLE, TENN
          United States
          Member #33372
          February 20, 2006
          1044 Posts
          Offline
          Posted: October 8, 2010, 1:03 pm - IP Logged

          Buy a house for cash.  This way you don't end up paying $350,000 on a $120,000 home over a 30 year stretch.  If you take $50,000 and invest it wisely, then there is no reason why you shouldn't see $40,000 to $60,000 return per $10,000 invested over a 6 to 8 year period.  Check out Lithium stocks and up and comming Chinese Bio Tech stocks.  Huge gains and returns on these over the next 3 years.  The one to watch right now would be Weikang Bio-Technology Group Co. Inc.  Stock Symbol (WKBT).  It is  a very strong buy option right now.  The Chinese Stock Market has HUGE potential right now because they are quickly becoming an economic force to be reckoned with.

          I could not agree more.  Having a house fully paid is like money in the bank.  When the economy enters its downward cycle (as it always does at some point in time) I would have a house as a safety net.  Hopefully my stock investments would more than compensate during the downward cycle but, if not, I would still have my house.

            OwlCreekBridge's avatar - Lottery-031.jpg
            lottoville
            United States
            Member #95474
            August 11, 2010
            132 Posts
            Offline
            Posted: October 8, 2010, 5:55 pm - IP Logged

            if i won a lot, id prob lease.  i mean if someone comes climbing over my wall and hurts themselves they can sue the property owner for  damages not me.

            I think you're right. Also buying a house might not be a good idea right now. I think housing prices still have a way to go until they hit bottom.

              OwlCreekBridge's avatar - Lottery-031.jpg
              lottoville
              United States
              Member #95474
              August 11, 2010
              132 Posts
              Offline
              Posted: October 8, 2010, 6:15 pm - IP Logged

              I could not agree more.  Having a house fully paid is like money in the bank.  When the economy enters its downward cycle (as it always does at some point in time) I would have a house as a safety net.  Hopefully my stock investments would more than compensate during the downward cycle but, if not, I would still have my house.

              Not necessarily. Even someone who owns a house that is paid in full must still pay annual property tax. People don't pay their property tax the government can take their house away.

              I never understood the like money in the bank saying. Are people aware that banks fail all the time?

              http://en.wikipedia.org/wiki/2008%E2%80%932010_bank_failures_in_the_United_States

              Granted your money is insured by the FDIC for up to $250,000 but how much you want to bet getting your cash from the FDIC would be about as easy as prying a Krispy Kreme donut from a cop? You'd probably be looking at months and months of red tape before seeing a dime.

                Avatar
                Monkey Butt, USA
                United States
                Member #54569
                August 23, 2007
                1124 Posts
                Offline
                Posted: October 8, 2010, 6:19 pm - IP Logged

                I would purchase my house and invest the rest. I see no reason to pay 3 times the price over a period of years or a penalty amount if I pay off the loan early. I'm trying to save money, so why would I voluntarily give the mortgage company an extra $100K to $200K for a house that is not even worth that much?

                Since it is only 2 million dollars I would still continue in my employment of choice and continue to contribute to my retirement portfolio. I would live my life to the fullest and enjoy everyday with carefree abandon.

                Should the great depression hit again during this time, I would not have to worry about being homeless because my home is paid for. My only problem would be food and employment.

                  Avatar
                  Sacramento, CA
                  United States
                  Member #96354
                  August 28, 2010
                  159 Posts
                  Offline
                  Posted: October 9, 2010, 7:54 pm - IP Logged

                  Here's a plan: I would only buy a house that would serve as a refuge if, say, you eventually drained your winnings away. Use that house as a rental property, which would afford you some level of income/tax shelter. Rent a nice condo, or a home, if your family needs one, using the proceeds from your rental to pay the bills, then just have a nice vacation once or twice a year. Go fishing, or attend ballgames. With the residual funds, you could invest in some conservative stocks, or perhaps start a business, or fund someone (preferably a relative..) starting a business, and receive monthly payments from them. The important thing to remember is that you must establish an income with your winnings to sustain your lifestyle without losing or risking the entire amount on unprofitable investiments, or expensive habits.

                    Avatar
                    NY
                    United States
                    Member #23835
                    October 16, 2005
                    3474 Posts
                    Offline
                    Posted: October 9, 2010, 8:04 pm - IP Logged

                    Did you even look at the chart I posted? http://goldprice.org/gold-price-history.html#1_year_gold_price

                    Over 40 years the value of gold has increased substantially If you want to know what really fluctuates, it's the value of the dollar.

                    Ben Bernanke the chairman of the federal reserve has already gone on the record saying there isn't enough inflation. No one can see into the future but people can look back into the past. Look at what's happened to every fiat currency in history. Cash is not the safe havenyou make it out to be. Look at the value of the dollar since the inception of the fed.

                    http://www.infoplease.com/ipa/A0001519.html

                    Have you looked at the charts yourself? You say that the price has "increased substantially" over the paast 40 years, but that's not what I see. What I see is a sharp spike in price over a very brief period, followed by a huge crash that is then followed by many years ofminor fluctuation without any meaningful increase.  All of that is now being followed by another large spike in the price. Things tend to run in cycles, and how do you know the price of gold isn't doing exactly what it did 30 years ago? After the price crashed in the early 80's it took about 25 years to reach the same point. That's zero profit for 25 years, and a loss if you needed to liquidate in the meantime. Current gold prices are  increasing partly (largely?) because of thinking like yours, but that's a very limited demand. When that demand lessens, as it is sure to do, the supply will guarantee another decrease in price. The only real question is when it will happen.

                    Gold has no more intrinsic value than money. Every practical use it has is based on people having money to spend, mostly for things that are far from necessary.  If there's a crash that widely affects other safe investments who's going to be buying your gold when you need to liquidate it to buy something with real value, such as food or energy?

                      psykomo's avatar - animal shark.jpg

                      United States
                      Member #4877
                      May 30, 2004
                      5118 Posts
                      Offline
                      Posted: October 9, 2010, 8:13 pm - IP Logged

                      So here's the situation...you just won $2 million dollars (after taxes) and want to buy a house. Would you rather buy a house with the winnings or get a mortgage so you have more money to invest?

                      My thinking is that if the jackpot is really low you would be better off to invest the money and get a mortgage and pay it off in 10-20 years. If you buy a house with the winnings you won't have that much to invest it.

                      Would banks even approve your loan if you have money from winning the lottery?

                      buy a houseobamo will$$pay4>>UUU&$

                        OwlCreekBridge's avatar - Lottery-031.jpg
                        lottoville
                        United States
                        Member #95474
                        August 11, 2010
                        132 Posts
                        Offline
                        Posted: October 9, 2010, 9:04 pm - IP Logged

                        Have you looked at the charts yourself? You say that the price has "increased substantially" over the paast 40 years, but that's not what I see. What I see is a sharp spike in price over a very brief period, followed by a huge crash that is then followed by many years ofminor fluctuation without any meaningful increase.  All of that is now being followed by another large spike in the price. Things tend to run in cycles, and how do you know the price of gold isn't doing exactly what it did 30 years ago? After the price crashed in the early 80's it took about 25 years to reach the same point. That's zero profit for 25 years, and a loss if you needed to liquidate in the meantime. Current gold prices are  increasing partly (largely?) because of thinking like yours, but that's a very limited demand. When that demand lessens, as it is sure to do, the supply will guarantee another decrease in price. The only real question is when it will happen.

                        Gold has no more intrinsic value than money. Every practical use it has is based on people having money to spend, mostly for things that are far from necessary.  If there's a crash that widely affects other safe investments who's going to be buying your gold when you need to liquidate it to buy something with real value, such as food or energy?

                        To answer your question I've looked at that chart every day for over a year. Anyone who knows how to read a chart can see, someone who bought an oz of gold 40 years ago could buy it for less than $100. They can sell it now for over $1000. That's what I mean when I said the value increased substantially.

                        There is only so much food you can stock up on. I already have a garage full of can goods. The government can always print out more money, someone actually needs to dig up gold. Never trust politicians with a printing press. Look at what happened in Zimbabwe, a loaf of bread was over a million zimbabwe dollars, people were panning for gold in rivers. No one cared about paper money, gold was used as currency to buy food and over necessities. This is only a recent example, there are many similar examples in history. If the cr** hits the fan people will still need some form of currency and it sure won't be paper.

                        Gold For Bread - Zimbabwe

                        http://www.youtube.com/watch?v=7ubJp6rmUYM

                         

                        It's easy to sit back in snipe at someone's idea. If you're so smart, let me hear your solutions so I can shoot those down in return.

                          Avatar

                          United States
                          Member #85338
                          January 13, 2010
                          143 Posts
                          Offline
                          Posted: October 11, 2010, 4:21 pm - IP Logged

                          I think that I would keep my mortgage intact in the same year that I win a jackpot. Pay it off Jan 1.  The mortgage interest is deductible and I would like to offset any taxes, where I really don't get anything back.

                           

                          Would I buy a new house....no just a good alarm system, perhaps renovate (corian countertops or marble, some new flooring, no gold fixtures though). Update the HVAC, A sunroom with a walkout basement underneath, nice fireplace.  Solar panels on the barn.

                           

                          I'll keep the cars thatI have....one will need a new transmission, the other could use a going over....either way a hell of alot cheaper than buying a new car and having it depreciate.

                          I might consider a cabin in some remote area to get away from it all.....where I can hunt, fish, hike, swim and have true peace and solitude.  Someplace that would help me re-charge my batteries.  A beach is nice but can get crowded....too much to worry about during hurricane season and the left coast is too far away.

                          "It's not a matter of 'if,' but a matter of 'WHEN!!!'  "

                            savagegoose's avatar - ProfilePho
                            adelaide sa
                            Australia
                            Member #37136
                            April 11, 2006
                            3300 Posts
                            Offline
                            Posted: October 11, 2010, 5:24 pm - IP Logged

                            im a bit of a gold bug myself have been for the last 15 years. but its not about gold its about devaluation of the USD. any commodity priced in USD is a good investment ATM gold just happens to be the most duarable.

                            2014 = -1016; 2015= -1409; 2016 JAN = -106; FEB= -81; MAR= -131; APR= - 87: MAY= -91; JUN= -39; JUL=-134; AUG= -124; SEP = -123; OCT= -84  NOV=- 73 TOT= -3498

                            keno historic = -2291 ; 2015= -603; 2016= JAN=-32, FEB= +12 , MAR= -86, APR = -77. MAY= -48, JUN= -29, JUL=-71; AUG = -52; SEPT= -43; OCT = +56 NOV = -33 TOT= -3297

                              gonnawinwatchme's avatar - images
                              Wisconsin
                              United States
                              Member #58835
                              February 27, 2008
                              148 Posts
                              Offline
                              Posted: October 11, 2010, 7:38 pm - IP Logged

                              I would always buy a house with cash.  Coming from someone who is struggling to pay her mortgage right now, owning a house free and clear sounds like heaven!