On 4/06/2015 8:35 AM, Julie Bove wrote:
>
> "Xeno" > wrote in message
> ...
>> On 3/06/2015 10:58 PM, Ed Pawlowski wrote:
>>> On 6/3/2015 8:35 AM, William wrote:
>>>
>>>> You read a story like the following link will take you to, and you say
>>>> to yourself, how can people go through life and be so incredibly
>>>> stupid by the time they reach retirement age? Some of them act like
>>>> they are playing the lottery with their homes.
>>>>
>>>>
>>>> http://bigstory.ap.org/article/39c19...d-housing-debt
>>>>
>>>>
>>>>
>>>>
>>>> Obviously, the Bankers act like pigs at the trough writing mortgages
>>>> to people who clearly are not qualified for the loans. If we put a few
>>>> thousand mortgage bankers in the Federal Penetentiary for 50 years
>>>> without possibility of parole, some of this idiotic monetary policy
>>>> will cease.
>>>>
>>>>
>>>> William
>>>>
>>>>
>>>
>>> Some is the fault of greedy bankers. Some is the fault of mortgage
>>> brokers that lied about the applicants income. Most of the fault is the
>>> homeowners that looked at their house as an ATM and kept taking cash
>>> out. It was so easy to get a home equity loan or line of credit.
>>>
>>> I'm not a financial wizard, but I did know that the house should be paid
>>> for before retirement age and to be essentially debt free. It is dumb to
>>> take equity money for a 2 week vacation and pay it back with interest
>>> over the nest 10 or 20 years, but people did thing like that.
>>
>> People are still doing that! A couple we know borrowed $100,000 some
>> 20 years back. They *still* owe $200,000 on the house now! As you
>> suggested, they used it as an ATM. The husband is now about 70 and
>> still has to work. His wife, who is about 55, is also working and it
>> looks like they will never be able to pay it off.
>
> We bought our house so late in life we probably will never pay it off.
> But we couldn't have bought a house any sooner because of my husband
> having to move so frequently.
That's a bit of a furphy. You could have just as easily bought an
investment property, rented it out and allowed it to pay itself off, for
the most part, then moved in when your "moving" circumstances altered
and allowed it. That would have allowed you to keep up with the housing
market.
>>
>> Two things here.. People need to learn how to set priorities. Then
>> they need to learn how to stick to their goals. When I borrowed money
>> for a housing loan in 1986, my critical priority was to get the
>> housing loan paid off. That was achieved in 13 years. By the way, we
>> bought the bare minimum that suited our needs - a small timber
>> cottage. No McMansion for us. Along the way we also invested in
>> another house in a nearby street. That one, whilst not a startling
>> performer in the investment stakes, took care of itself and, given
>> recent rampant increases in house prices, looks like it might turn out
>> to be a capital gains win.
>>
>> Bought an investment unit in 2000 which we sold in 2003 for a modest
>> gain. We have also sold our primary residence twice now, each time
>> getting a newer and larger house.
>>
>> Sounds easy, doesn't it? Well, just after we bought our first home,
>> interest rates climbed through the roof during the 90s and, in order
>> to maintain our roof over our head, I took on part time jobs. When
>> other people were losing their homes, we managed to keep ours. Had I
>> been forced to sell, We would not be homeowners today.
>>
>> One more thing people of today would be wise to do. That is, *buy what
>> you need*! Instead, too many people, the young especially, buy what
>> they want and, as always, what they want is way above their needs and
>> their affordability range.
>
> Oh gawd! There is a Bothell community group on Facebook. At least once
> a week, a young person will post that they are moving out and they
> need...and then they post a list of all the things that they need. They
> don't want to buy them. They want these things to be given to them.
> Furniture, dishes, you name it! Sometimes they aren't picky. But a
> recent list included a cream colored bedroom set and espresso colored
> living room furniture. Another woman asked for beds and other things for
> her kids, for free and in excellent condition. The weird thing is that
> they often *get* these things! When I moved out, I had my bed, dresser,
> some floor pillows and kitchen things.
When I moved out at age 21 I took nothing from home with me apart from
what was mine. Besides, I was traveling and that type of accoutrement
was more than a little difficult to carry. When I married at age 28 and
settled down, my mother gave me a few items of cutlery, crockery and
some beaten up old pots and pans. That was it. We STILL have many of
those items of cutlery in our day to day use drawer. When we married I
bought some cheap furniture at a sale and had an old dining table given
to us. The cheap chairs didn't last but the dining table was with us
until we moved in here 2 years ago. I tried to give it away but had not
takers so I eventually cut it up. We borrowed a fridge for the first
year and bought a new one in 1987. We still had that fridge until the
27/05/2015. Yes, just a few days back! The old fridge, a Kelvinator, was
still working after 34 years but its time was nigh. It was not an auto
defrost so was a pain since moving here into this high humidity area and
required a manual defrost every month or so. As well, it was showing
signs of needing new capacitors in the compressor and was losing
efficiency. I had to keep the temp setting at 8.5 on a scale of 9 just
to keep icecream from getting mushy so that told me our old faithful
fridge had earned its retirement (recycling).
I have never been one to buy new where SH was just as good nor have I
been one to toss out appliances and the like that are still serviceable.
>>
>> We could have bought as our first home a nice new 4 bedroom brick home
>> in a new suburb as so many of our friends did. Instead we bought a run
>> down 2 bedroom timber cottage in need of renovation in a leafy
>> established urban area. We couldn't even afford to do any renovations
>> for 16 years until we had paid the mortgage off and divested ourselves
>> of the investment unit. We spent a mere $20,000 on renovating our home
>> over a two year span and sold it for 4.5 times more than we paid for
>> it. One of our friends who bought a nice new 4 bedroom home in a new
>> suburb didn't even make three times their original buy price when they
>> sold after a similar span of time and they spent a hell of a lot more
>> on extensions to their house - double garage, extra bedroom, etc.
>>
>> Buy what you need and can afford, set priorities and stick to goals.
>> Simple? Obviously not given the number of people under mortgage stress
>> these days!
>
> These days, younger people want it all and want it now.
Blame the marketing gurus for that. They have it down to a fine art,
brand image and all that! ;-)
--
Xeno.