What you did today

[theslug]

You guys are going to think I'm crazy but when it comes time for me to buy a house I'm going to blow old timer house buying out of the water and go with 30% down, at least. I just don't believe in mortgages and I think they are stupid and retarded and that people need to learn how to save money instead of buying crap they can't afford so I'm going to save up like a 100 grand through investments or cd's, I'm not too sure on the means yet but through some way where I'm not losing through inflation but still gaining money that I would otherwise be getting through equity in the home and then in the end I'd be saving money becuase I wouldn't be paying interest for 15 years. Is this the candy factory? Because yall are a bunch of suckers. Mwhahahah.

[Hurlshort]

Where I live, 30% is like $150,000 for an average house. That's a bit tough to save up for. Also, while I'm saving there is a good chance that the price will rise, and I will get considerably less real estate for the same price. At least that's the way the market was for about a decade before it tanked recently.

[Enoch]

That's fair enough, slug. Different people have different tolerances for indebtedness. I'd be lying if I didn't say that looking at the amount of debt that we're going to be assuming shortly can be very intimidating.

 

But the alternative is continuing to pay rent every month-- at least with a mortgage, you're building your ownership interest, and any appreciation in the value of the property is yours and yours alone. Rent, on the other hand, gets you a place to stay and nothing else. Plus, the portions of the mortgage that make up interest and property taxes are completely tax deductable, which is an enormous help. Fixed-rate mortages are a little over 6% right now. The tax deductability effectively reduces it by whatever your marginal tax rate is, then you figure that 2-3 of those percentage points represent the projected annual inflation rate (more inflation is actually good for fixed-rate debtors). Then you factor in that home prices are unusually low right now (we're buying for less than the same property sold for 4 years ago), and it doesn't look quite so "stupid and retarded."

[qt3.14159]

I'm actually trying to buy a house right now as well. Unfortunately the community I want to live in has very few houses on the market right now. Here in Oklahoma, our housing market has actually improved a tiny bit in the last couple of years. I guess that's what happens when a good portion of your economy is made up of the oil and gas industries.

 

Anyhow, there's only one house out there that I'd even consider living in and that one has weird problems. I *really* need to be closed by the end of September, though... so I'm considering it anyway. That or hoping something else shows up very, very soon.

[Shryke]

i am at work, and i have a hangover...

 

i went out last night to a gig/show thingy, and some girl i met last week at a party kept buying me drinks

[Tigranes]

slug, everyone would walk in a buy a house right away if they could, yes, but it's very, very impractical for most of us.

 

I think the state of our society is that up to university age, it makes sense to keep to a very simple adage - if you dont have money in your wallet, then don't spend it - but ironically that can really hamstring you and make your situation untenable after that.

[Walsingham]

Sluggo, I thought you were becoming an accountant? If you borrow to make an investment is that bad? A house is a form of investment, and in most cases, swapping spending

[theslug]

Editing this post becuase it became too confusing. In the end 20% is the magic number for a down payment. You don't have to get private mortgage insurance but its also low enough to where you aren't wasting money that could be invested and get a much better rate of return. In conclusion I hate the system and I'm going to be a hermit in the forest worshiping my woodland critter friends.

Edited September 4, 2008 by theslug

[WILL THE ALMIGHTY]

I have 20GB... but I only browse the internet. No downloading game patches or large files for me.

[Hurlshort]

Editing this post becuase it became too confusing. In the end 20% is the magic number for a down payment. You don't have to get private mortgage insurance but its also low enough to where you aren't wasting money that could be invested and get a much better rate of return. In conclusion I hate the system and I'm going to be a hermit in the forest worshiping my woodland critter friends.

 

I can agree with that. I wish I had 20% when I got into my place. Like all investments, there is risk involved. Even if you pay 100%, if the market tanks, you are losing money.

[LadyCrimson]

Hurlshot's not too far away from us, and for the area he's correct. There's not many who can manage to save up 20%, let alone 30% (at least for their first house) entirely on their own. Most people we've known who managed to buy (when we couldn't) had help from their families.

 

We absolutely hate being in debt - and refused to touch those hinky loans - so I understand that POV...and that's one reason we didn't buy condos in our 20's etc. Like many others, boy do we regret that now, haha. The rent-while-you-save thing seemed fine when we were in our 20's...not so much in our late 30's/early 40's w/time running out and watching inflation+the house prices skyrocket almost out of our reach despite savings and higher income brackets.

 

Our house is small, but eventually we could either add-on and it'd be awesome, or sell it and move on. I think it'll work out for us a lot better in the long run.

We do hate the mortgage, tho. :D

Edited September 4, 2008 by LadyCrimson

[Calax]

I did (drumroll) nothing.

 

Tomorrow I work for my four hours a week but thats about it. I'm waiting for job corp and need to send out tomorrow for unemployment. other than that it's just a matter of waiting on applications

 

oh wait... I raided on WoW and got nothing... I am truly pathetic.

[Walsingham]

Yesterday I had my fourth singing lesson, and even I had to admit I'm making progress. I'm not ready for a stage yet, but my teacher has suggested we could aim to get me on stage in a couple of months. But i've also got a tonne of stuff going on right now, and it could be a bridge too far.

 

After the singing I met up with my power-packed assistant, and we did some actual work ...in a restaurant. I totally love doing this for creative work, and don't believe you can beat it. We hit the targets then headed off to a pub quiz, where it suddenly occurred to me he might get on really well with one of my friends. She's a bit older than him, but she IS very clever. But then I realised it was completely weird for me to try and fix him up, so dropped it.

 

Finished the evening by consuming a large pile of corned beef sandwiches, which was just fething stupid. But I am staggeringly easy to manipulate. Simply tell me something is impossible.

[LadyCrimson]

I didn't know where to put this - it's not a video, music, or movie. Just a little website with a flash-created spider you can "play" with. The purpose is to try and make as realistic a spider as they could in flash. I think it's awesome. http://www.onemotion.com/flash/spider/

 

The other thing I did today - watch hubby try to fix the toilet. It works now, but not sure if it'll stay that way. It may be about plumber-time....again. Older houses and plumbing...sigh.

Plus I played more WotLK beta. Death Knights are so much fun...in fact, they're too fun. They'll be nerfed a lot before release, I'm sure. heh

Edited September 5, 2008 by LadyCrimson

[taks]

Simply tell me something is impossible.

world peace is an impossible goal... oh wait, whirled peas is an impossible goal.

 

taks

[taks]

^enoch: www.americanblinds.com - you'll save 40% or more on blinds. you can get all the same ones that are offered in stores. these are actually only 10% or so cheaper than at places like home depot or lowes, but there's no tax and no shipping. blinds are ridiculously easy to install yourself. even mechanically declined folks like me (with a motto "if i can afford to pay someone to do something, i will") can handle blinds.

 

^theslug: i'd prefer to be a hermit living in the woods somewhere, too. actually, i'd like to live in south fork, CO, but in a nice cabin on the rio grande. of course, that would also require a mortgage. i'm toying with the idea of going full contract/consultant anyway, so such a dream may be reality sometime in the near future.

 

yes, btw, 20% is the magic number for PMI, but there are caveats. one that isn't widely publicized is that while banks don't charge PMI on new loans if your down payment is over 20%, they don't have to drop your PMI till after you get to 22% on an existing loan. complicating matters further, they do not have to take into consideration appreciation, either. HOWEVER, if you can prove you are at 20% of the home equity (appraisal), you can request to have the PMI dropped, and they are required to oblige you. the problem with getting an appraisal is that your property taxes will likely go up.

 

here's another catch that most don't know about and lenders don't often tell you about: the 80-10-10 loan. a good lender, when faced with a client that has excellent credit (720 or above usually), should offer this type of loan. 80% mortgage, 10% down, 10% home equity loan. the home equity loan is usually at a higher rate, but it is on such a small portion (relatively speaking) of the total loan that the interest rate is immaterial. this type of loan is particularly attractive for ARM buyers that do not intend to stay in their home for the length of the equity loan, which is typically less than 10 years. that way, you end up paying mostly interest on the HEL, which is deductible, and you pay the thing off when you sell.

 

taks

[taks]

oh, oddly, my current HELOC (actually a line of credit) has a lower interest rate than my mortgage, which went adjustable this past january. much lower, in fact, and my mortgage is only 6.5%. HELOCs are more closely reflective of the discount rate which explains the inversion.

 

taks

[Deadly_Nightshade]

Errr... Damn printing errors... S.T.L.A.K.E.R. Clear Sky is not in today as they thought it would be. Or, rather, it was in but they had to send those copies back because they lacked an all-important slip of paper.

[Hurlshort]

I went with an 80-20 loan, so I had nothing down. I had to refinance after two years because it was an ARM, but we didn't pay any prepayment penalty (we did take on another 5k in debt to cover the closing costs though.) It was a bad choice by us, compounded by the fact the market dropped after we bought. But I learned a lot, I can't be too upset about failing to predict the future, and I'm not in a situation where I can't make my payments.

 

I'll know a lot more the next time I go to buy a house. It really is a very complex process. Right now I'm just waiting for the housing market in my area to return to normal. Nothing is selling in my area, even at drastically reduced prices. If I could break even on my property, I might try to do that and get into something bigger, but currently I'd probably take about a 25% (100k) loss if I tried to sell.

[taks]

our first was a 7/1 ARM, this last one was a 5/1 ARM. we got the last one in december of 2002, with a 3.875% rate. no matter what the housing market does, i'm sitting pretty. the first house was a high rate (i think actually lower than the 8.75% number i mentioned previously), but the regular 30-year loans were mid 8% range anyway. we were both working and had few expenses so it was a good deal and a good learning experience.

 

taks

[Laozi]

I did so rather intense beard growing and then made a pretty nice deposit. (5.6 courics)

[mkreku]

Today I found out that the only girl I've wanted to have sex with since my horrible break-up is supposed to be alone from the 23'rd of October. Her boyfriend is leaving for something I'm not really interested in. I have no problem hitting on her like a dog from that date on. This will be fun.

[Calax]

sent in the unemployment papers today... now to talk to officedepot and turn in the application to Barns and Nobel booksellers.

[theslug]

Your quite knowledgeable about houses Taks. When I buy my cabin I'll be sure to send you a pm so be ready in about 25 years. But seriously it would be so awesome to have a place where no ones really around. Ideally it would be sweet to have a place on the far outskirts of a large city. Close enough to where you can get high speed internet and all the others luxuries and conveniences of the city but far enough to where you don't have to deal with traffic and crazy minorities on regular basis and of course have the money to sustain this life style for as long as you wish, which if I remember correctly your some kind of communication god and could do it, though I could be confusing you with like the other 20 people on the board who seemingly are also high ranked in that area. Aint that weird....maybe if I camp out here long enough I'll be successful too. Though I doubt cat farms will gain any market leverage within the next couple of decades. Way too progressive and ahead of its time.

[Deadly_Nightshade]

Today I found out that the only girl I've wanted to have sex with since my horrible break-up is supposed to be alone from the 23'rd of October. Her boyfriend is leaving for something I'm not really interested in. I have no problem hitting on her like a dog from that date on. This will be fun.

 

Good luck.