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re: What's your opinion of people who are underwater on their mortgages?
Posted on 6/16/15 at 3:46 pm to jimbeam
Posted on 6/16/15 at 3:46 pm to jimbeam
quote:
Yep. Sure if you sell a stock low you lose money. But if you still have the stock you haven't lost anything at the moment
But you have the opportunity cost while waiting for it to come back.
0
Posted on 6/16/15 at 3:46 pm to LNCHBOX
quote:
quote: Our secret to a mortgage free life - go for something small (that you can afford even if you are in financial bind). Don't go for the "big investment" or the McMansion to keep up with your friends. Impossible in a decent size city.
Also have you read her other posts? Family lives on some family compound and all the kids are homeschooled by her.
Most people don't live a lifestyle like that
Posted on 6/16/15 at 3:52 pm to lsunurse
My take, what the F--k were they thinking? 
A mortgage should not be more then 20% take home pay. I also blame the banks for trying to make easy money too! They knew better, but Obama let them do it. 
A mortgage should not be more then 20% take home pay. I also blame the banks for trying to make easy money too! They knew better, but Obama let them do it. Posted on 6/16/15 at 3:53 pm to gorillacoco
Conventional wisdom also has everyone believing they can buy a house. Too many people are buying houses that really shouldnt be. That does two things
1)Artificially drives up the price of houses in a neighborhood, blowing up the bubble, and
2)Puts people in the position of owing too much money with too little income. It's always amazed me when people buy houses with 3.5% down, then freak out when they lose a job and have no money to pay off the mortgage.
So when your neighbor forecloses on the house and gets evicted, it drives down neighborhood prices, causing otherwise good homeowners to go underwater.
1)Artificially drives up the price of houses in a neighborhood, blowing up the bubble, and
2)Puts people in the position of owing too much money with too little income. It's always amazed me when people buy houses with 3.5% down, then freak out when they lose a job and have no money to pay off the mortgage.
So when your neighbor forecloses on the house and gets evicted, it drives down neighborhood prices, causing otherwise good homeowners to go underwater.
Posted on 6/16/15 at 3:59 pm to Catman88
quote:
quote: Is it their fault that the home lost value? Do you think they owe the bank the full price of the home?
Kind of hard to do this when you get divorced and she gets over 50% of your take home pay each month.
There are circumstances that happen to people unfortunately.
Posted on 6/16/15 at 4:00 pm to GetCocky11
quote:
I've seen people in their mid-20s spending >$200k on houses over the past couple of years. It is incredibly risky of them to do it.
Really depends on where you live though. To be in a halfway decent safe neighborhood you gotta pay around 250-300k at least around here.
Houses less than 200k will put you in a crappy area that isn't as safe and with horrible school districts.
Posted on 6/16/15 at 4:00 pm to NYNolaguy1
quote:
Puts people in the position of owing too much money with too little income. It's always amazed me when people buy houses with 3.5% down, then freak out when they lose a job and have no money to pay off the mortgage.
Why does the amount of down payment have any effect on this? On a $250k purchase price, you're talking about a monthly difference less than $200.
I don't disagree that some people were buying houses they shouldn't be, but the down payment isn't the issue.
This post was edited on 6/16/15 at 4:02 pm
Posted on 6/16/15 at 4:04 pm to LNCHBOX
Its about having skin in the game.
I put down 100 bucks on a 155K house. Walking away costs me nothing but a credit score.
If I had put down 10K cash, I'd be MUCH more likely to hang around until I could at least try to recoup that 10K.
I put down 100 bucks on a 155K house. Walking away costs me nothing but a credit score.
If I had put down 10K cash, I'd be MUCH more likely to hang around until I could at least try to recoup that 10K.
Posted on 6/16/15 at 4:10 pm to AUjim
quote:
Its about having skin in the game.
I put down 100 bucks on a 155K house. Walking away costs me nothing but a credit score.
If I had put down 10K cash, I'd be MUCH more likely to hang around until I could at least try to recoup that 10K.
Not only that, but if you put a sizable down payment, you're more likely to pay it off. Too many people focus on the investment aspect of a house, when at least IMO, they should be focused on financial security. Living in a paid off house is one of the most secure things you can do. When you lose sight of that and focus on how big it is and if you can afford the monthly note, that gets lost.
ETA-Also, if you put a bigger down payment, you are much less likely to end up underwater, as your principal will be less.
This post was edited on 6/16/15 at 4:16 pm
Posted on 6/16/15 at 4:12 pm to AUjim
It's easy to say that for $100, but the real world example is pretty close to $10k.
ETA: I do get your point though.
ETA: I do get your point though.
This post was edited on 6/16/15 at 4:17 pm
Posted on 6/16/15 at 4:17 pm to LNCHBOX
This is a real world example.
I actually put down $100 on a 155K house in 2008. I actually put down 15K cash last year. Which do you think I'm more likely to walk away from?
I actually put down $100 on a 155K house in 2008. I actually put down 15K cash last year. Which do you think I'm more likely to walk away from?
Posted on 6/16/15 at 4:18 pm to AUjim
That's likely to never be able to happen again.
Posted on 6/16/15 at 4:20 pm to AUjim
You must have used a VA benefit.
Posted on 6/16/15 at 4:20 pm to LNCHBOX
I agree. And I hope not. I'd be all for a 5% minimum down payment.
Posted on 6/16/15 at 4:26 pm to AUjim
quote:
I agree. And I hope not. I'd be all for a 5% minimum down payment.
20%, nothing less. The last two houses I bought, I had to put down no less then that. Third house, I paid cash for it in full.
Oh, it also just pisses me off when people go out and buy a car. First thing they think is that they tell the salesman they can afford X amount a month. Guess what people? They going to screw you if you go that route.
This post was edited on 6/16/15 at 4:30 pm
Posted on 6/16/15 at 4:28 pm to fishfighter
quote:
20%, nothing less. The last two houses I bought, I had to put down no less then that. Third house, I paid cash for it in full.
This actually keeps the market from bubbles, as all purchases would be limited by cash, not credit. I am all for it.
Posted on 6/16/15 at 4:30 pm to fishfighter
quote:
My take, what the F--k were they thinking? A mortgage should not be more then 20% take home pay. I also blame the banks for trying to make easy money too! They knew better, but Obama let them do it.
The housing crisis occurred during Bush's watch.
Posted on 6/16/15 at 5:11 pm to PygmalionEffect
quote:
The housing crisis occurred during Bush's watch.
Just when you thought this thread couldn't get any dumber...
A homo liberal with a speech impediment is responsible for the crash.
Posted on 6/16/15 at 5:13 pm to gorillacoco
quote:
What's your opinion of people who are underwater on their mortgages?
Buy a home, and you risk it losing value. The more you spend, the more you risk. Don't build your dream house unless you know you will be there for 10+ years.
I think people who need to move but are underwater on their homes should consider renting them out.
Posted on 6/16/15 at 5:14 pm to gorillacoco
Home ownership is usually the better financial choice, but the financial advantages are routinely overstated.
As for being underwater, you buy a house to live in. Underwater is merely a paper value until you sell the place. Just don't sell.
Walking away because you're under water is immoral.
As for being underwater, you buy a house to live in. Underwater is merely a paper value until you sell the place. Just don't sell.
Walking away because you're under water is immoral.
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