Posted on 05/30/2005 6:19:28 AM PDT by Flavius
Edited on 05/30/2005 6:35:29 AM PDT by Sidebar Moderator. [history]
PHILADELPHIA - To walk Thayer Street in northeast Philadelphia is to count, door by door, the economic devastation afflicting a working-class neighborhood. On a single block, 18 of the 42 brick rowhouses have gone into foreclosure in the past three years.
There's Marciela Perez, who fell ill with cancer, lacked health insurance and stopped making mortgage payments. Barrel-chested Richard Hidalgo, who got divorced and could no longer make his monthly nut. And Mike O'Mara, a rawboned and crew-cut truck driver who took on too much debt, lost his job and fell behind on his mortgage.
"Mortgage companies convinced us to refinance, and each time our bill went up," O'Mara said as he surveyed his narrow street from his shaded front porch. "You fall behind and they swoop down on you."
Excerpt msnbc.msn.com
I have used interest only to leverage one income property to buy another. The rent on the first covers the nut plus enough to write down the debt by 75% before the traditional set-up kicks in. That will be in 8 years and I will be locked in at 6.25% for twenty years based on the remaining principal which will be 25% of the original debt. Now, that makes sense.
Problem with that is that 1) most folks ain't that disciplined; 2) many folks are dirt stupid (gotta have that BIG PLASMA SCREEN TV); credit card companies hate people who pay off their usurus loans so they find hidden fees to tack on.
Get rid of all your credit cards say I. Have a portable job so you never have to worry about income. And stay off the financial services grid.
Au contraire. I live in a rapidly appreciating area, and I won't be in the house more than five years. Makes perfect sense.
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I hope your plan works but remember, man proposes, God disposes. I you are biting off more than you could chew under a standard fixed rate mtge then you are out where the ice is thin until you sell.
Yep, just like trying to get every kid into college. A disaster waiting to happen.
And if they hadn't offered up ways for "the peur" to get mortgages, these same bureaucrats would be screaming classism, racism, and any other kind of -ism they could think of...
..and the story was written by a man.
If you didn't refinance the whole debt, it may be smaller. If you finance it all, it's bigger because they usually throw in the mortgage paperwork and profit costs into the new principal.
My sarcasm tag did not show, sorry.
I get calls from finance companies trying to offer me credit. I tell them I owe nothing to anyone. I am debt free. I have no mortgage, I pay the credit card bill fully each month and I paid cash for my car. I think it is possible to live within ones means. I think it is possible to save for what one wants. Why is this such a foreign concept?
"Yes but banking system depends on them, if everyone lived within their means.
The GDP would disappear"
They must hate me since i've never borrowed a cent except for 1 1st mortgage which I paid off 8 years before it was due and it was at 6%.
Still own the home and bought my condo for cash and haven't had a mortgage payment in 20 years.
From the LA Times this weekend re: your "consistently climbing" "sure thing" DC market.
"The chief economist for the Mortgage Bankers Assn. is worried enough about the torrid housing market to get out of it.
"I'm going to rent for a while," said Douglas Duncan, who expects "significant reversals" in regions that have enjoyed strong home price appreciation, including Washington, D.C., Florida and California. He plans to sell his suburban Washington home, which has tripled in value since he bought it a dozen years ago, and move into an apartment.
. . .
It's a human temptation to stay in the game until the last moment. But Duncan, the economist for the mortgage bankers, doesn't seem to feel it. Workmen are prepping his home now for a sale, he said.
Acting on his gut has served him well before. In 1988, as the economist was moving to Washington, he went to look at a house that was for sale. Three couples were already there. They started a bidding war in the living room.
"This is irrational behavior," Duncan remembers thinking. He decided to rent. Shortly afterward, the market crashed.
In 1993, he decided it was a good time to own. The price he paid for his house was about a third less than the previous owner, who had lost it in a foreclosure sale."
Quote: That's a lot like refinancing a house - you just re-set the payout back into the bank's favor. During the first half of the life of your mortgage, the house payment is predominantly interest, while the last half is mostly principal. Refinance and you just begin paying more interest again.
Bingo!!!! It's amazing the number of people who do not understand this concept.
-..and the story was written by a man.-
A Girlie Man!
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