hotcorvmamma Posted September 21, 2007 Report Share Posted September 21, 2007 I'm not sure how to take this. Do you believe Bush is to blame for the subprime disaster? Directly No! But it is his administration in there right now! Maybe the post should have said " other people" Quote Link to comment Share on other sites More sharing options...
TTQ B4U Posted September 21, 2007 Report Share Posted September 21, 2007 I would be more inclined to blame Alan Greenspan. By his own admission he failed to see that the explosive growth of the housing market would lead to such large numbers of mortgages to people with questionable credit which would in turn hurt the economy in the long run. By the time he warned everyone it was too late. Bottom line is owning a home is the American Dream and not everyone can have that dream. Many will always rent and will never be able to buy. That's just the way of the economy. Lowering rates didn't help the middle class either. It just allowed the builders to way overcharge for homes knowing that buyers would pay the price to accept a lower rate mortgage. Now a number of those same folks are realizing that you can't have your cake and eat it too. The ones that did make out are the ones who got in at a good rate, funded the home purchase properly and didn't bit off more than they can chew. I'm not sure how to take this. Do you believe Bush is to blame for the subprime disaster? Quote Link to comment Share on other sites More sharing options...
93toNV Posted September 21, 2007 Report Share Posted September 21, 2007 Interesting reads. I do agree the housing market is in a bad spot and values will be leveling off or correcting. I wouldn't blame the housing market entirely though. People created their own financial problems over the past few years and now everyone is trying to point fingers. The population as a whole in the last 10 years has overspent and continues to live well beyond their means. I mean when folks are going belly up because interest rates are rising and they can't afford a mere $500 to $750 per month bump in their budget, that's a key sign they had issues well before they bought a house. People absolutely feel it's acceptable to have to live off both incomes and that carrying credit card debt is an okay thing to do in life. My wife's practice has been booked 90 days out with Bankruptcy appts. for the past 2-3 years. While there are a number of reasons for folks going belly up, living beyond their means still remains the top reason. They have two car payments, very often are upside down on one or both, have too big of a home and live on plastic. Personally, finding a reasonably priced home to buy is still better than renting. Just looking at it from a tax standpoint a typical $800 mo. rent payment is about equal to $1,100 home payment...and there are still areas where home values are likely to stay even or go up. I mean traditionally what 3-6% per year is expected. There never were days of having a home jump $20k in value by the end of phase one. That was and is all BS. The problem however is that with folks spending all they have and not saving anything is that they can't afford the down payment. I think the population as a whole feels they should be able to buy a house with only 5-10% down and still be able to easily afford it. Now it all depends on how long they saved, but many work 2-3-4 years to save up even just 10%. Not much really so it doesn't surprise me that they are among the many that got caught up in the poor lender craze. Most all of those folks had no business buying a house in the first place, let alone overpriced ones. At least not until they had decent savings and a family budget that was more in line with reality. We also have a trend of folks buying way too much home and treating it like their retirement package. Again, crazy moves. Tons of my wife's clients make decent money but save near nothing and live in homes that cost $350-$500k with mortgages that are between 90-95% of the price they paid. Crazy...but they couldn't do like their parents likely did and actually save and "earn" that level of house. WOW, you do have a very good view on things, and reading your post here made me realize how much I need to stop digging myself into debt. I am guilty of living off 2 incomes, carrying credit debt, and not saving back anything. I also took out an equity loan to pay off my 06' Fusion. I can afford to pay this stuff back, but i realize that maybe I should save a little more and spend a little less, especially since I got the equity loan I am spending way more than Im bringing in and if I keep it up I'll be right back where I started before I took out the equity loan. However I think the equity loan was a good choice as it took care of alot of my old debt and only raised my house payment about $100 a month, and I payed off THOUSANDS with that. I bought my house as a foreclosure for cheap, had it appraised and it appraised for $100,000 MORE than I bought it for, so in that respect I borrowed some against the house to kill some of my bills. Was that really a bad move? Quote Link to comment Share on other sites More sharing options...
Wease Posted September 21, 2007 Report Share Posted September 21, 2007 I will have my house paid off before I'm 50 and you'll still be renting well after that. There's your difference that I see and care about. Plus the mortgage tax credit. So continue to rent your house, I'll own mine... :nod: Quote Link to comment Share on other sites More sharing options...
TTQ B4U Posted September 21, 2007 Report Share Posted September 21, 2007 What you did isn't a bad move so long as you keep your credit cards paid off and change the habits that as you say put you in that position to begin with. Bottom line is in general, it's not a bad move for everyone, but the statistics show and the foreclosure rates reinforce it, that most people don't change their habits and eventually rack up more debt, stretch there budget and then have no other means to pay the newly racked up revolving debt or their first and now second mortgages. It's a viscous cycle for sure. Debt doesn't go away, it just changes form and is treated differently should one go bankrupt. My advice has always been to spend it when you don't have it. It's a sales thing....you make a lot one month, save it and spend it during a bad month that's bound to come. You'll spend it more wisely. Pay off all your debt outside say a standard mortage and then you'll be able to sock-away thousands into investments that really being to add up. Two family incomes work similarly. We save and invest the income from my wifes practice so she can cut back and perhaps not work for a few years when our kids are in the critical ages of say 12-18 years old with zero impact on our budget and also so that we can retire in our 50's should be choose to do so. So far we're on track to quit at age 55 with a more than comfy lifestyle. My goal is to make up five more years before too long It means living in a smaller house, not buying crazy amounts of clothing and driving average cars, but I still enjoy quite a few toys and have near zero anxiety...and to me that's priceless. We're close to pulling the trigger on our next home, but have decided to wait it out a bit. Goal then would be to have no more than a 10year note. Good luck man! WOW, you do have a very good view on things, and reading your post here made me realize how much I need to stop digging myself into debt. I am guilty of living off 2 incomes, carrying credit debt, and not saving back anything. I also took out an equity loan to pay off my 06' Fusion. I can afford to pay this stuff back, but i realize that maybe I should save a little more and spend a little less, especially since I got the equity loan I am spending way more than Im bringing in and if I keep it up I'll be right back where I started before I took out the equity loan. However I think the equity loan was a good choice as it took care of alot of my old debt and only raised my house payment about $100 a month, and I payed off THOUSANDS with that. I bought my house as a foreclosure for cheap, had it appraised and it appraised for $100,000 MORE than I bought it for, so in that respect I borrowed some against the house to kill some of my bills. Was that really a bad move? Quote Link to comment Share on other sites More sharing options...
Wease Posted September 21, 2007 Report Share Posted September 21, 2007 Interesting reads... That's probably one of the best things I've read on this website in a long time. I see stupid people in debt ALL the time. There are many on this website that I suspect live beyond their means. I see people who I know make far less money than I do, living it up and I wonder "How are they doing it? Are they not putting any money away?" I see two income families that have to work because their lifestyle dictates it. Two car payments, too big of a house, vacations, you name it. And then I hear about all of these bankruptcies and forclosures and it all makes sense. Living beyond your means is the root of the money/debt problems in this country. It's sickening. Be part of the solution, not the problem. There are going to be MANY people in serious trouble come retirement in this country. You don't get your spending under control and start putting money away at an early age, you will pay for it. Your style of living will change dramatically when you stop working. If you ever can stop working. These people today that live like this, they won't be able to. And social security will not what you think it will be. So you can't count on that as a large, steady stream of income... Quote Link to comment Share on other sites More sharing options...
V8 Beast Posted September 21, 2007 Report Share Posted September 21, 2007 To the defense of the people on the site a lot of them are young. 18 to 30 are the ages where people learn many life lessons. You just have to hope they wise up before they dig a hole too deep to climb out of. Quote Link to comment Share on other sites More sharing options...
LJ Posted September 21, 2007 Report Share Posted September 21, 2007 The point is the market may not get better as it is artificial inflated. Also buying a new house in a communities is bad as people get these sup prime loans loser there house now you have a sec8 house. Or a short sell. My parents NEW house has dropped from a 200K to 180K. COLUMBUS WAS NOT IN AN ARTIFICIALLY INFLATED HOUSING BUBBLE!!! How many times can I try to beat this into people's heads and they still do not get it? The prices are low because of a surplus market, but nothing in the Columbus market was ever artificially inflated. It is strictly a matter of supply and demand right now Quote Link to comment Share on other sites More sharing options...
LJ Posted September 21, 2007 Report Share Posted September 21, 2007 That's probably one of the best things I've read on this website in a long time. I see stupid people in debt ALL the time. There are many on this website that I suspect live beyond their means. I see people who I know make far less money than I do, living it up and I wonder "How are they doing it? Are they not putting any money away?" I see two income families that have to work because their lifestyle dictates it. Two car payments, too big of a house, vacations, you name it. And then I hear about all of these bankruptcies and forclosures and it all makes sense. Living beyond your means is the root of the money/debt problems in this country. It's sickening. Be part of the solution, not the problem. There are going to be MANY people in serious trouble come retirement in this country. You don't get your spending under control and start putting money away at an early age, you will pay for it. Your style of living will change dramatically when you stop working. If you ever can stop working. These people today that live like this, they won't be able to. And social security will not what you think it will be. So you can't count on that as a large, steady stream of income... My dad is probably the smartest man I know when it comes to how to spend your money. He said the only time it is bad to buy a house or to buy ANYTHING is when you have to change your lifestyle. Example. I was living in a condo and I wanted to get out of there so I was looking to buy a house. I ended up buying a house for a price I could afford. With the new mortgage and everything, I did not have to readjust my budget or take out extra loans or anything. I am still putting the same percentage in my 401k, saving the same amount, living off of the same amount, etc. It would have been a bad idea to buy the house if I had to cut back my spending money, drop my savings, use loans to cover certain items and lower my 401k. Many people do this. They lower the standard of living they can afford to purchase a home, and then go in debt trying to cover the difference and live the same or a better lifestyle Quote Link to comment Share on other sites More sharing options...
LJ Posted September 21, 2007 Report Share Posted September 21, 2007 Its a buyers market right now, if you can afford to buy the houses now you will make out in the future.. Word, and the rates are superb right now Quote Link to comment Share on other sites More sharing options...
Wease Posted September 21, 2007 Report Share Posted September 21, 2007 Many people do this. They lower the standard of living they can afford to purchase a home, and then go in debt trying to cover the difference and live the same or a better lifestyle Actually, they don't "lower" their standard of living, they increase it, but not by getting a better paying job or paying some debt off. They go further into debt for that better house or better car. So yeah, it's a higher lifestyle in the amount of material things you have, but in the long run, it hurts you. +1 to the 401K. Every financial decision I make doesn't affect my 401K, my savings account, or my emergency fund. I still put $15K a year into my 401K (my wife puts into hers as well), and have money in other accounts if I need it. Putting money away when you are young is so important. Start with a percentage you can handle and forget about it. You don't see that money in your check, so it makes no difference. And when you can, increase it as much as you can... Quote Link to comment Share on other sites More sharing options...
craig71188 Posted September 21, 2007 Report Share Posted September 21, 2007 Houses, cars, investments - makes no difference - there are always "good deals" and "bad deals". Buying in a new development - especially early on - used to almost guarantee you a profit by the time it was "built out". Now there are a glut of new houses - and a lack of buyers, and falling prices. In more established neighborhoods, you can still find good buys - houses below market value that just need some TLC, and overpriced pigs that someone bought to "flip" and did a bunch of half-assed "upgrades" that will need redone. To me it boils down to one word - EQUITY. The great thing about owing land - they aren't making any more of it! As to debt - I wil never borrow money to buy a car - why make payments on a depreciating asset. I will (and have) borrowed money to buy the right house in the right location at the right price since the appreciation will offset some of the interest. Yes, the housing market can collapse and the houses devalue - but if you've bought well, it will only be temporary, and good houses in good areas will rarely be worth less. Quote Link to comment Share on other sites More sharing options...
LJ Posted September 21, 2007 Report Share Posted September 21, 2007 Actually, they don't "lower" their standard of living, they increase it, but not by getting a better paying job or paying some debt off. They go further into debt for that better house or better car. So yeah, it's a higher lifestyle in the amount of material things you have, but in the long run, it hurts you. +1 to the 401K. Every financial decision I make doesn't affect my 401K, my savings account, or my emergency fund. I still put $15K a year into my 401K (my wife puts into hers as well), and have money in other accounts if I need it. Putting money away when you are young is so important. Start with a percentage you can handle and forget about it. You don't see that money in your check, so it makes no difference. And when you can, increase it as much as you can... To me standard of living = what you can pay in cash, minus certain ness.(cars early in your career etc.) If you buy a house and have to buy groceries on a credit card because you can't afford them due to your bills, you spent too much Quote Link to comment Share on other sites More sharing options...
88lx5oh Posted September 22, 2007 Report Share Posted September 22, 2007 why is living off of 2 incomes bad?? we all dont have 80k a year jobs. some of us are just starting out. i think the main thing is having a plan/goal in your life. me and my wife bought our home in hilliard under appraised value with about 30k in equity. we planned on living here for atleast 5 years, doing some remodeling, and by the time we have payed down some debt, and saved some money, in that 5 years we sell and move. we are not looking to get into a huge home, but somethign close to my job. also a bit larger, but moving away form the city will get you a nicer/bigger home for same amoutn of money. also we will both be grossing more money in 5 years. and i looked at buying this home as investment. we budget as well as we can, but still are using both incomes. we are paying debt we both had before we met each other and not accumulating more. we dont use credit cards at all. but we do put out alot of money a month paying bills. i hate being looked at as sub par when it comes to matters as this because we both dont have 80k a year jobs at the moment. we are working towards a goal. in 5 years both cars payed off, 50% of misc debt payed down, and the house paye down some. after the vehicles are payed off, im not gonna start putting that money back to save, i will use that money to pay off other debt till all thats left is a mortgage. i thought it was a pretty good game plan. Quote Link to comment Share on other sites More sharing options...
Bam Posted September 22, 2007 Report Share Posted September 22, 2007 why is living off of 2 incomes bad?? we all dont have 80k a year jobs. some of us are just starting out. i think the main thing is having a plan/goal in your life. me and my wife bought our home in hilliard under appraised value with about 30k in equity. we planned on living here for atleast 5 years, doing some remodeling, and by the time we have payed down some debt, and saved some money, in that 5 years we sell and move. we are not looking to get into a huge home, but somethign close to my job. also a bit larger, but moving away form the city will get you a nicer/bigger home for same amoutn of money. also we will both be grossing more money in 5 years. and i looked at buying this home as investment. we budget as well as we can, but still are using both incomes. we are paying debt we both had before we met each other and not accumulating more. we dont use credit cards at all. but we do put out alot of money a month paying bills. i hate being looked at as sub par when it comes to matters as this because we both dont have 80k a year jobs at the moment. we are working towards a goal. in 5 years both cars payed off, 50% of misc debt payed down, and the house paye down some. after the vehicles are payed off, im not gonna start putting that money back to save, i will use that money to pay off other debt till all thats left is a mortgage. i thought it was a pretty good game plan. I agree hoblick, and props to you/your wife for taking the iniative of making yours lives better. We're both in school and hope to have MUCH better jobs in 5 years than we do know, and its a necessity to live off both incomes now, it is for tons of people. Paying off debt is very important, as it can ruin you. everything is an investment when buying, good or bad. I look at my soon to be home purchase two ways, either an investment or just another way to pay for my housing. My mortgage will be around $800 w/ taxes/month, I've been paying $650/month in rent for the past two years, for what? And we need to move so we have more space and good luck finding a larger place or townhome that's 3bed/2.5 bath in Dublin for UNDER $800/month, shit lots are over $1000. I'm not too concerned with making money in 5 years on my purchase, I'd just like to break even with realtor fees, etc. Which shouldn't be hard as these places I'm looking have equity like what you got. the monthly amount to me is a wash, its a fact of life and a necessity. With owning a place I just get tax incentives among other perks. Quote Link to comment Share on other sites More sharing options...
88lx5oh Posted September 22, 2007 Report Share Posted September 22, 2007 yeah ill be moving away from the city on my next purchase. i really dont like living in the city anyway. i grew up with acres of land and wooded area to roam around on. and i want that back for my wife and i and eventually are children Quote Link to comment Share on other sites More sharing options...
Bam Posted September 22, 2007 Report Share Posted September 22, 2007 nice marysville isn't too far, but is nice. my aunt/uncle have 28 acres out there, they bought one of those pre-built houses that they just put together or whatever, have been out there 3 years, VERY nice, wooded, trails, pond, above ground swimming pool, etc. huge garage, living the life. Quote Link to comment Share on other sites More sharing options...
Conesmasher Posted September 22, 2007 Report Share Posted September 22, 2007 Renting is perfectly fine for temporary periods of time, such as new to an area, not sure how long your going to be there, etc. Renting however is not a way of life and based upon the price of the house, in relation to it's potential value, renting may or may not be better than buying. There are trillions of different options. I lived in a rented house that was renting for $400 in 2005 and $500 in 2006......we liked the place, but the rent was going to go up again, so we thought what a great time to get into the market. Our home was built in 2001 It sold for $155,000 Westerville schools, Columbus taxes, etc Appraised last year by the "tax man" for 164k We bought it for 129k. I couldn't see walking away from this steal, because it's a house I know we can afford. Quote Link to comment Share on other sites More sharing options...
Bam Posted September 22, 2007 Report Share Posted September 22, 2007 Wow a house for that cheap? My 2 bed/2 bath 1 story apartment is $750/month. My mortgage could actually be CHEAPER. Quote Link to comment Share on other sites More sharing options...
TTQ B4U Posted September 22, 2007 Report Share Posted September 22, 2007 if you're speaking of my previous comments, it's pretty clear you're in a different situation than those that I was referencing. You're young and starting out and obviously on the upswing. especially in the case where you're using the joint income to pay down debts. It does make sense to pay down debt such as high interest loans and credit cards more than just saving it for a rainy day and living with interest. Car, student loans and home loans are another story. the comments I made are referencing folks who are using both incomes to live above their means....ie, typical high end home, two expensive cars they have no real ability to comfortably pay on, little savings and no real game plan other than living paycheck to paycheck. they are also the same folks who furnish their home on credit cards or eat up their home equity to do it. everyone is different and different priorities. it's just sad that in the past even just 5 years so many folks are so close to the edge that 1-2 months of either income being changed or lost they go belly up. they never give themselves the chance to save one income as they continue to need both. weather it's simply an 80k income, which really isn't much at all today, or more, you'd be surprised at the stats on incomes and those that go belly up. it's not just folks making low amounts of money. as I said before it's not what you make, it's what you save and you don't need the best of anything to make the most of what you have. why is living off of 2 incomes bad?? Quote Link to comment Share on other sites More sharing options...
Tractor Posted September 23, 2007 Report Share Posted September 23, 2007 Basically in Central Ohio houses aren't selling because they don't have a good agent selling them. I know an agent right now that is so busy with closings its just silly. He has been in the business for a long time knows how to sell in any market. Alot of guys trying now are noobs that could only sell them if they sell themselves. They don't know jack about fitting clients with a home. Also everyone keeps hearing prices are going down so they are holding there position waiting for the sellers to break and start bringing the prices down. Once all the news clears and everyone forgets we have a little mortgage problem people will begin to purchase houses again. At least thats what we're thinking on the investment forums that I'm on. The national association of realtors just released their numbers and at the moment central ohio has a 7 month inventory of new builds. I'd say get in and buy now or in the next 2 years if you care to get in at a good price. Central Ohio is still one of the only places in the country still growing in population at a good rate. Its just not like it was 3 years ago, but still not bad. Evan Quote Link to comment Share on other sites More sharing options...
LJ Posted September 23, 2007 Report Share Posted September 23, 2007 Basically in Central Ohio houses aren't selling because they don't have a good agent selling them. Interesting angle, but no... You posted that there is a 7 month surplus of new builds, that doesn't even factor in all the foreclosures AND the regular sales. There is probably close to a 1+ year surplus of houses on the market in central ohio. Some of the top agents and agents with an angle are the ones getting all the business just because there is so much out there that you aren't seeing the middle level agents getting all the business Quote Link to comment Share on other sites More sharing options...
thorne Posted September 23, 2007 Author Report Share Posted September 23, 2007 COLUMBUS WAS NOT IN AN ARTIFICIALLY INFLATED HOUSING BUBBLE!!! How many times can I try to beat this into people's heads and they still do not get it? The prices are low because of a surplus market, but nothing in the Columbus market was ever artificially inflated. It is strictly a matter of supply and demand right now Bull shit it was not, Let me show you my parents house? All of these defaults on loans it hurting anyone in the already over priced communities. Look up anything in alkire lakes compare the purchase price with the value now and they've lived there 3 years, And did upgrades. My old house did the same thing, MI/Dominion fucked Everyone, They got people to buy houses beyond what they could afford based on lies. They wanted me to get a house @ 250K. I got one for 150K and my payments had rose to a point that I was very happy I did not choose 250K. Quote Link to comment Share on other sites More sharing options...
thorne Posted September 23, 2007 Author Report Share Posted September 23, 2007 I had to learn the whole credit thing the hardware, I know have 3 CC's 1 has a very small balance because I use it to get gas and pay it off. I used to live to the dot on 2 incomes. Now I live off 1 income and am 30days ahead on all bills - insurance. But its a life lesson. Quote Link to comment Share on other sites More sharing options...
Bam Posted September 23, 2007 Report Share Posted September 23, 2007 That's not the housing market's fault, its the idiots that fell for scams or ploys. If the house isn't worth 250k, DON'T BUY IT. That's all there is to it. You can say the housing market is inflated, but the real point is, something is only worth what people will pay for it. If all these people that purchased a home had educated themselves about mortgages and home values in their specific area, there wouldn't be a problem, but they didn't, and its their fault they are fucked, I have NO SYMPATHY for a single one, that's EXACTLY what they deserve, because they didn't take the time to have the knowledge. Quote Link to comment Share on other sites More sharing options...
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