He'd make more money with the 300K he didn't use on a house investing in something else. Why tie up your money on something that could drop in value? A house if considered "good debt" and will help establish his credit worthiness. Just because you are rich doesn't mean you'll never need a loan or credit card for the rest of your life. Either way, nice house and he obviously likes the neighborhood or else he wouldn't have bought the house there. BTW, home loan interest is tax deductible and closing costs are what? $2000 at the most?
any investment can drop in value. and banks are going to loan him money likely just based on his current income, not his credit history. athletes don't live by the same rules the average joe does. and the last reason as to why you want to buy a home is for the tax deduction. it's just BS realtors spew to make you feel like it's a good reason to go into debt, not to mention they want to make a sale. Watt made the kind of purchase that would benefit from the deduction, but he benefits even more by not paying interest in the first place.
$2,000? For starters you almost always have to pay 3% in realtor fees. So on a 400k house, that alone is 12k.
Unless that $300,000 in a more liquid investment can earn him a better return than the interest on the mortgage.
you're right. even a modest 5-8% return in an index fund is possible. Watt probably thinks he doesn't need to worry about it with his current contract.
The selling party pays realtor fees and they're not related to whether or not the home was bank financed. He might have been able to get the price of the home reduced if he didn't use a buyer's realtor, and a as result the seller was able to save that 3%, to pass on to the buyer if the buyer so negotiated it. The only difference in closing costs between financing a home and not would be those closing costs directly associated with getting the financing. All other closing costs would be there anyway. That being the case, a couple thousand sounds fair. I don't think ultimately it will matter much for JJ cash vs. financed. He didn't overspend - relative to his anticipated earnings over the next 10 years - and if a great investment comes along he can always borrow against the house (or more realistically, borrow against his income/net worth), if he needs the liquidity. I expect when he does start getting into the bigger contracts he will find a money manager to help him out.
i swear my ex-gf house looks exactly like this, right there above the kitchen and the table, is a large game room, then to the left of that is a theater room.. but she doesnt live in pearland, cookie-cutter homes...
Pearland sucks! It was nice about 15 years ago. Now it has grown way to fast and the infrastructure has not kept up with the population increase. Traffic and city planning is horrible. The area down by 288 has become filled with thugs. If you go the other direction, in the old town going towards Friendswood, you've got an abundance of trashy rednecks. So you're around undesirables no matter where you go. I have had the misfortune to live here for the last couple of years and I can't wait to move.
the amount of people willing to argue over matters of personal taste on the internet never ceases to amaze me.
JJ grew up in a small town very family oriented and has family down regularly...he isnt a super party...clubbing guy! I can't believe how negative people are being about him being a responsible guy...pro athlete or not hes a person that wants modest nice things. I respect him for that! It shows that hes not one of those crazed people who spends a ton of money just because he has it.
I can't stand a TV in the living room. That's why you have a media room. I like a living room to chill, read a book, talk to guests before serving dinner. Not have everyone staring at the wall. Plus most living room couches are not made to watch TV. That's why these are made...
