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| Paying Bills; Spinoff from TOB | |
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| Tweet Topic Started: May 10 2010, 09:36 AM (862 Views) | |
| DairyQueen2049 | May 11 2010, 07:10 AM Post #31 |
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DRAGON BREATH. DRAGGIN' BUTT
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My brother had one of those balloon things MT2 - but his luck ran the other way - the 5 yrs ended with interest rates at the lowest they had ever been, and now his payments shrunk. When we started looking for horse property 4 yrs ago the bank said we could borrow up to almost a half million. HA. Ha. ha. We knew very much better. I can't imagine not paying my farrier or vet on time. Farrier is due when he is done - paid in full. I like to think this is why he comes on time and ready to go and calls if he's late or has an emergency call.* Vet used to be the same, but he retired an now ours comes from a busy office so the office bills us. *I also try to steer him clear of those I know who don't pay on time, or with rubber checks. Edited by DairyQueen2049, May 11 2010, 07:14 AM.
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| MayaTy02 | May 11 2010, 07:13 AM Post #32 |
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You're BANNED!
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yeah actually our payments went down too so it wasn't the ARM that was the problem, is was the looming date when we would have all that accrued principal to pay, on top of an adjustable rate. THAT is what kept me up at night and would have increased our payment to well out of our means. |
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| Everythingbutwings | May 11 2010, 07:33 AM Post #33 |
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Schooling
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I recall, about 4 years ago, encouraging my young son to buy a house because the interest rates were the lowest they had been in my lifetime. You really have to look at the historical aspects of home ownership and fluctuations in the market. Balloon payments and ARM's have never made sense to me as someone who plans to stay in my home and not use it as a short term CD. When the open land in Prince William county began to fill with subdivisions full of houses "starting from the low $400's" I asked myself where were all the people going to be working who were supposed to be buying those houses? It made no sense to me. Just because new house prices were in the stratosphere didn't make my home more valuable by $100K and, when we refinanced (for a lower interest rate) and were told we could take out X amount more of equity, I did the math and said "I can't PAY that monthly mortgage bill if I do". Two years later, I am so glad I had that kind of sense. My home's assessed value dropped that over inflated $100K and is back where it statistically ought to have been long term. I'm also surrounded by a heck of a lot of new homes that never sold or have been foreclosed on by creditors due to people buying beyond their means. Do I wish my house was still much more valuable? Of course! But even more, I wish that the tax rate on my modest home didn't have to go up to counter the debt that was created by building all those new subdivisions and the public resources that they require to allow them to function. ![]() I have no sympathy for those who willingly signed up for those promises. Edited by Everythingbutwings, May 11 2010, 07:34 AM.
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| Robin | May 11 2010, 08:06 AM Post #34 |
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We're on a bridge, Chaaaaaaaaarlie!
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Part of the problem with current debt is past experience. I was born just after WW2 and have watched the personal finance world change. When I was a young child, people in their 20s did not expect to own a home. When you bought, you were going to pay about one year's gross salary (not take home pay) in down payment. There were very few student loans. If you went to college (and a lot of kids didn't in the 1960s), you either had scholarships, your family paid or you worked between terms. Grad school students expected the university to make it possible for them through assistantships and some scholarships. I didn't see an ATM machine until the 1970s. I couldn't get a credit card then because I only had a very small income. I never heard of debit cards. When I went to buy my home around 1980, I could not get a mortgage (went land contract). Why? Because I was a single woman and banks loaned to families. And I had 20% down. So the world of that time helped keep people who might not be very responsible with money from getting deeply into trouble. But at a cost. Many people who could have done well in college never went because there was no way to fund it. People who could have used credit cards responsibly never had them. People who would have been good home owning neighbors for you were instead renting elsewhere and trying to save enough to buy a house outright before inflation again took away the possibility. Trying to find a balance between public measures of control and personal freedom to proceed as you wish is not easy. I also suspect that a significant part of the current difficulty is because the rules people were living by changed, houses didn't keep going up in value, jobs weren't secure, medical costs skyrocketed, bankruptcy laws changed. All that all at once and a lot of people can't find a way to cope. Edited by Robin, May 11 2010, 08:08 AM.
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| Ethan & Ella's Mom | May 11 2010, 08:45 AM Post #35 |
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Off visiting Candy Cave, be right back.
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My in-laws had a balloon mortgage, however, when their interest dropped, they continued to pay at the 15% interest (or whatever it was) and paid off their house very quickly. We were pre-approved for a mortgage over 100k what we paid for our current home. I felt no need to buy a house that expensive knowing what the monthly payment would be (not including escrowed taxes and insurance). When things got tight for us, we made huge adjustments quickly. The horse moved home, I stopped showing and money went into the bank and we quickly paid off unnecessary bills. Even though 2 months later things were fine, we continued with the changes we made. I have heard of people who can't make their mortgage payments or other monthly bills but yet spend money on unnecessary things and horse show. I really have no pity when people have that attitude. |
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| Won for Me | May 11 2010, 09:08 AM Post #36 |
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Is the meadow on fire?
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I was approved for over double what my new house cost. The lending company had that I paid the full monthly mortgage payment on the farm in Florida and still approved me for that much. If I didn't have taxes taken out of my paycheck, I didn't have a car payment and no horses, I could possibly pay what they approved me for. The lending company never asked about take home pay. They only asked about gross pay...I think that might be one of the issues. Not that they think people don't have taxes taken out, but take home pay varies widely with health insurance and tax brackets. If it was complex math, I could see people getting in a bind with the lending companies, but isn't this part of personal responsibility? How much do you bring home, what are your bills, what do you have left over that could go towards a mortgage? Pretty simple addition and subtraction. |
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| Trialbyfire | May 11 2010, 09:27 AM Post #37 |
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You're BANNED!
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This is something we think about a lot. I was lucky to get a scholarship to undergrade and graduated without loans, but my husband's parents encouraged him to take an ROTC scholarship at a school they could not afford otherwise. After a year of ROTC, he realized he didn't want to continue with it, but had to transfer to another school despite having a lot of friends and doing very well. He was (and still is today) angry with his parents for not realizing what they could/could not afford before he went off to college. As it happened *he* picked the school and they found a way to make it work, but instead should have told him it was out of their price range....what did he know at 17? I am unlikely to send my kids to 4-year private colleges even if they can get in and we can afford to send them. I honestly do not think that I can justify a $200K bachelor's degree....I loved college myself, but would be the first to admit that it didn't actually prepare me to get a job. And if I had to pay off student loans I would have been in big trouble. |
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| Little Diva | May 11 2010, 10:04 AM Post #38 |
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You're BANNED!
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I will agree that the way you are raised has a lot to do with your respect for money. And I think that is at the heart of it -- a respect for money and personal finances. My step children have absolutely no respect for money and demand that they have the best of everything all of the time -- iphones, plus an ipod each and their own computers. I think it is outrageous frankly. And their parents have not taught them to SAVE money at all. What I hear all of the time is "its their money." Well yeah, it is, but teach them some responsibilty, but then again, how can you teach your children to be fiscially responsible if you are not? |
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| Trixie | May 11 2010, 10:47 AM Post #39 |
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Thomas H. Cruise!
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There have actually been a lot of news stories lately saying that overpaying for a bachelor's degree is a bad idea financially, since it's become the new high school - hundreds of thousands of dollars for a degree in Communications that qualifies you to be an administrative assistant really just isn't that good of an investment. A lot of kids would actually do well to do two years of community college, get excellent grades, and finish the last two at a four year school - possibly even on scholarship. For instance, here in NOVA, Northern Virginia Community College guarantees admission to, among others, George Mason, Hollins, William & Mary, UVA, and Virginia Tech, as long you have a GPA at or above a 3.5. In-state tuition annually at NOVA is about $3200 if you do 15 credits/semester for in state students versus paying a lot more to attend private college, so you can save quite a bit. Is it "prestigious?" Perhaps not, but in the end you can graduate with the exact same degree as someone who went to a four year school all the way through (say, Hollins, at $29K per year - you've just shaved $51K off your total school bill). I agree that it's much, much easier to "start off" if you're not paying back a ton in loans. I just wish we didn't market college attendance at expensive universities as if it's the only way that a person will become gainfully employed. I've seen way too many people graduate with relatively useless degrees and over $100K in debt. |
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