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NutmegCT

NutmegCT

Great Pumpkin
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So I'm sitting here munching my hard boiled egg and toast, and watching the morning news.

Several stations and websites are interviewing folks about their mortgage and/or high cost of living problems. Agreed - life's getting tougher. ARM's move up, and milk costs more than gas.

But I look at the house where the folks live. Three car garage, huge kitchen, double refrigerator, six burner pro cooktop, wall mounted TV. Then they're shown lamenting the price of gas, while they're filling up their two Chevy Tahoe's.

It's dangerous, but sometimes necessary, to get into debt. But it's a disaster if debt gets out of control. And having "everything big, new and shiny" is a very poor reason to let debt get out of control.

I'm concerned that our already-overspent treasury will be again over-obligated to relieve some folks of the problems they brought on themselves.

ok - I've vented for the day. Back to sweetness and light.
Tom
 
Imagine if you paid to have all the work done on your house and cars. I'd be broke but I'm still in debt to my eyeballs - ohhh look an MG for sale :smile:
 
ah - but at least you're not having your MG's foreclosed on. And you didn't get them 'cuz they were shiny and new!

T.
 
They shoulda done more work themselves. It's a shame how many people don't know how to do anything anymore. All they see on TV is make the big bucks and buy what you want. Nobody ever taught them the principals of "sweat equity". I'm not a rich man and don't make a ton of money in relation to where I live but I have a lot of nice things becasue I have the ability to do.
 
<span style="font-style: italic">"All they see on TV is make the big bucks and buy what you want. "</span>

And that's going to get us into more trouble than we can ever imagine, over the next 30 years or so. Buying happiness - can't be done, but seems that a lot of folks never learned that. Just borrow today and borrow tomorrow. "We have all this stuff. Aren't we supposed to be happy now?" Your/my retirement is likely based on pension fund investments. And most of those pension fund investments had a hefty concentration of "collateralized mortgage obligations".

Unfortunately the borrowing problem isn't just true for individuals; look at our incredible national debt.

Ya gotta pay the bills eventually. And the later we wait, the more we owe.

Hmmm - can a country be foreclosed?

Don't get me wrong. If someone is about to lose a house because they asked the right questions but were blatantly misled, then they deserve help. But to buy stuff you can in no way pay for - it's a whole 'nother thing. That couple this morning had bought a $400K house with no money down, first year 0% interest, then 1% for four years, and finally 14%. Unreal. But they signed the dotted line, to borrow for the house, the SUVs, the houseful of furniture, etc. If they just "walk away" from the mortgage, they tossed away all they paid for. And their lender (or whoever bought their mortgage) is left with a worthless piece of paper (and/or property).

Like a former student told me when I asked her why she used her cell phone to call her dorm phone to check for messages: "I don't worry about the bill. Daddy pays."
 
What kills me are these people that pay $500000 or more for a little house in some "desireable" city. Where do they get that kind of money? I make decent wage, but there is NO WAY I could pay for a house half as much. I saw a show yesterday where a newlywed couple was paying 3/4 million for a house. OMG!!!! Thats like $7000 or more A MONTH just for a mortgage. UNREAL!!!! :wall:
 
<span style="font-style: italic">"but there is NO WAY I could pay for a house half as much"</span>

And those words are the best thing I've read in ages. You know you can't afford it, and you don't jeopardize your family by "getting in debt up to your eyeballs".

Sure wish those millions of folks who now can't make the payments had thought as responsibly as you!

T.
 
Back when I was buying a house 30 years ago (I'm still in the same house), the rule of thumb was one weeks salary for your mortgage. I had to put 25% down. It wasn't easy to get that kind of money for a downpayment, but it was doable. You knew what your interest rate was, and the only way your mortgage could go up was if the taxes increased. (Of course we know that they did). New cars??? They weren't in the cards for many years. And even then, I bought what I could afford.

But now I have a house that is paid for, it's as small as when I first bought it, and will be fine for my retirement. Can you imagine that we brought up two kids in a cape with only ONE BATHROOM...I still only have one bathroom...less to clean. :thumbsup: My wife appreciates that. :devilgrin:
 
We live in an "MTV Cribs" Generation. Sad that atheletes get (a-rod) $33 million dollars a year and don't care what it takes to make more, and Farmers get 10 cents a gallon for milk that they wake up at 5 am to start making.

Shame.
 
<div class="ubbcode-block"><div class="ubbcode-header">Quote:]What kills me are these people that pay $500000 or more for a little house in some "desireable" city. Where do they get that kind of money? I make decent wage, but there is NO WAY I could pay for a house half as much. I saw a show yesterday where a newlywed couple was paying 3/4 million for a house. OMG!!!! Thats like $7000 or more A MONTH just for a mortgage. UNREAL!!!! [/QUOTE]


Your numbers are off.

First of all, $500000 gets you a small house in the suburbs not the city around here.

Leaving that aside, wrt your mortgage calculation - even if the couple were putting only 5% down, at 7.5% (the current rate for the NY Metro area) your monthly nut is only a hair over 5k.

What boils my blood is the fact that of course if they did pay all that, then AMT would come and deny them the tax deductions on the mortgage interest and property tax. In many ways they'd be better off not paying and waiting for a bailout. Hmmm, now there's an idea.....
 
Hey...I take exception to the "TV on the wall" comment...My plasma's there and I paid CASH for it! ::strong hint of sarcasm:: :thumbsup:

On the serious side, SWMBO and I built this house about 8 1/2 years ago, just as the real estate here in Utah really started to boom. When we went shopping, we told the sales agents that we wanted to pay $175K tops. Every single one of them prequalified us and asked "Why are you limiting yourself? You easily qualify for $250-300K." Our response..."That might be true, but YOU don't have to pay my bills. We know what we can afford, and payments on a mortgage that high is more that we're willing to pay." We're so glad we stuck by our guns and didn't Buy too much house, or get into one of the discounted mortgages. After a 5 month bout of unemployment about 2 1/2 years ago, we survived OK, because of the fact we didn't overbuy or overborrow.

Greed and instant gratification have led us to this crisis. Greed on the part of sellers/lenders pushing people to buy more than they can really afford so they could pocket more money and commissions, and people's "need" to "I want it all, I want it all, I want it all, and I want it NOW!.
 
<span style="font-style: italic">"Greed and instant gratification have led us to this crisis."</span>

Ain't that the truth. Thanks for presenting it so concisely.

Now I wish I could read those words coming from someone under 30!

T.
 
The KEY WORD here is BAILOUT, thats just WORNG!
These people should be left holding the bag, NOT US!
Both the lenders and the homeowners, unless of course they can prove they were misled . In that case the lenders that did the misleding should be prosecuted, plain and simple.
My modest 800 sq ft home is paid for, NO ONE helped me out. I don`t own a home full of fancy furniture or have a driveway that has NEW cars and or trucks. I live within my means and expect others to do the same. Unfortunately, For us normal people living within our means a bailout will cost us in more ways than one. The biggrest bieng that NO ONE in the overextended debt situation will learn thier lesson for this experiance. And worse yet the lenders will walk away scott free with NO remorse at all. A sad sad situation indeed!
Entitlers are simply enablers no matter who they are or what the situation is, be them Parents or Government, enabeling people to carry on irresponsibly.
A prime example of Over Educated Idiots! {thats not to say all educated people are Idiots}
 
I agree, bailouts are wrong. Don't people have lawyers when they go to closing anymore?? I wasn't thrilled about having to pay a lawyer, but he was there looking after MY INTERESTS. Everything was explained in fine detail, and all questions were answered to my satisfaction. I knew exactly what was going on and what was required of me.

The burden of this problem should not fall on the taxpayers. Let the homeowners and lenders sink. Maybe people will start to live within their means and stuff like this won't happen again. I feel sorry for all those people that will lose their homes, but what were they thinking...that they'll be making a lot more money when the high interest arrives??
 
NutmegCT said:
Now I wish I could read those words coming from someone under 30!
Click to expand...
I'm a bit older than your number at 35 and I agree wholeheartedly with Rich's words. (BTW Rich -- sounds like you finally got your TV sorted out, nice to hear it)

My wife and I bought our place 2 years ago. We wanted to get closer to where we work, and this was the closest we could do (we work in a resort town -- Park City -- which has truly ridiculous house prices). We knew what we had for down payment, and what we could afford. We certainly could have qualified for another $100k or more, but that wasn't something we interested in. We bought a nice existing home, with plenty of room if we decide to have children. Your basic split level house, and we plan on still being here in 30 years.

We've both had periods of being out of work, and our parents raised us well. We manage our modest income carefully (we both work for a school district), and have minimal debt. Just the mortgage and one small loan on my wife's truck.

I'm not against the proper use of credit, but I also understand full well the costs involved. Both of us had a small amount of debt when we got married, and focused that first year on clearing it all out. Now we can continue to live comfortably without the crushing debt that so many have. My only real extravagance is the Bugeye, and that is funded totally by my music.

So some of us younger(ish) folks do get it, but sadly not too many of us.
 
At the age of 41 I have so far avoided ANY debt like the plague.
I feel fortunate every waking moment knowing that my money is my money, to invest spend or save as I see fit. :smile:
 
Drew - You've been successful in managing finances in your family. that is great to hear. Sometimes I worry that a lot of folks are in the "over my head in debt" situation themselves, and don't want to comment in public.

Carl - "I feel fortunate every waking moment knowing that my money is my money, to invest spend or save as I see fit." Congrats to you also. But I wonder how much of our savings/pension/retirement that we've put away is invested in imploding mortgage securities. Argh.

I just heard on local news this morning that there are 19000 new foreclosures just here in Connecticut. Man, that's scary. We only have 3 million people in the state.

What's the foreclosure situation in other states?

Tom
 
alana- even if the couple were putting only 5% down said:
Alana, I have to say I am stunned at this. That's <span style="font-weight: bold">only</span> $60,000 per year
for a house payment? By the financial standard I was brought up to believe;
one week's take home pay equals your maximum realistic house payment..........

Are you saying the average wage earner where you live takes home in their paycheck
$240,000 per year? That would translate to around $600,000. per year gross paycheck.

:shocked:

I simply cannot believe these kind of numbers. I can count the number of people I
know personally with yearly incomes over $ 1/2 million on one hand.

My house is long paid for but if it wasn't; a payment of ONLY $5,000. a month
would give me a heart attack.

So, if $600,000 is average worker's pay; how much could I expect as a professional
at the top of my game?? I might have to move up your way for a year or 2 two to
make me a coupla $$million fast cash!!

d
Click to expand...
 
I'm 35. I don't have much, I live in a mobilehome, on a rented lot. but I have only abou 2 years left to pay off my house, and everything else I have, I own. I hate owing anyone anything. my tv is 15 years old, I have the cheapest compuer I could get on clearance at walmart. We buy store brand groceries (with coupons), and cook homemade meals instead of odering in, or eating out. I have never used government aid of any sort. I have one credit card, that never gets used (and when it occationally does, it gets paid off before the bill is due). I put $50 a week into savings for emergency use only (which builds up to a large sum pretty darned quickly). I've never been "out of work" since I was 17 because I'm willing to adapt & learn and do something new, and occationally take a small cut in pay to get out of a bad job. I also don't "job hop" like a lot of people seem to do. In the past 20 years I've only had 4 jobs. I've seen some people that go through 4 jobs in a month. it's ridiculous.

Anyway. after all that venting I forgot what point I was going to make.
 
Kenny - that's not venting. That's something to be very proud of, you - and your entire family. Bravo.

Dale - keep in mind that many of the "problem" mortgages were made by companies who actually either fudged the borrower's income, or never even asked their income. Many of the $600,000 mortgage loans went to folks making under $40K. Those lending companies wanted the highest commission income possible. And they got it - while it lasted anyway. Then they sold the mortgages to other larger companies. Want to bet they suddenly go out of business just as the lawsuits begin?

T.
 
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