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Coach
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Posted: Thu Oct 2nd, 2008 07:36 pm |
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We need big ideas. Even if you don't like them when proposed, we need them.
That was FDR's secret. He shook things up.
Starting wars and promoting neo-fascism are not big ideas, they are oppressive.
Which candidate is capable of big ideas?
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King
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Posted: Thu Oct 2nd, 2008 07:59 pm |
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Coach wrote: Which candidate is capable of big ideas?
May be Obama...definitely not McCain.
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jmcarr
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Posted: Thu Oct 2nd, 2008 08:09 pm |
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Coach wrote: We need big ideas. Even if you don't like them when proposed, we need them.
That was FDR's secret. He shook things up.
Starting wars and promoting neo-fascism are not big ideas, they are oppressive.
Which candidate is capable of big ideas?
I cannot help but think of Reagan's big idea of SDI, i.e. Star Wars. But I know that was not your intention.
"Big Ideas" often sound excellent, but many times unravel in its inception. Reagan was fortunate in that, the Soviets, fearing SDI, agreed to major nuclear disarmaments at Reykjavic which, in turn, resulted in an enormous, breakthrough treaty in arms control, provided the US abandon SDI. Probably a good thing.
Still, at this point, the only "big idea" that would invigorate me politically would be taking us back to where we were eight years ago, before Bush "won" the election by promising cash-poor Americans taxation-surplus rebate checks. Essentially, Bush "bought" his election over Gore, and for the last eight years, has fleeced Americans to the point where we are bailing out the economy to the tune of 700 billion dollars.
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Coach
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Posted: Thu Oct 2nd, 2008 08:16 pm |
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You're right, SDI is not the kind of big idea I'm talking about. But his treatment of the USSR was.
Domestically, I'm not sure what precipitated what, and I need to check the timeline, but some highly significant economic items at least began to brew around that time that had a great impact... And I'm not talking about "trickle down".
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brudgers
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Posted: Thu Oct 2nd, 2008 08:23 pm |
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What could be bigger than getting rid of the AIT as part of the bailout?
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jmcarr
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Posted: Thu Oct 2nd, 2008 08:52 pm |
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brudgers wrote: What could be bigger than getting rid of the AIT as part of the bailout?
Did you mean the AMT, alternative minimum tax? Not making anywhere near $150,000 to $450,000 annually, I have no idea how deleting AMT will affects the economy. Is it really a big thing to delete AMT?
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brudgers
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Posted: Thu Oct 2nd, 2008 09:03 pm |
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| They're not getting rid of alternate item types?
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Alright
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Posted: Fri Oct 3rd, 2008 12:34 am |
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brudgers wrote: How did you live on less than $300 a month including room, board, books, supplies, laptop, and tuition?
I didn't live on less than $300 per month. I worked weekends and Summers all through architecture school. That paid for my food, gas, supplies, entertainment.
"Room" was with the parents (for the first 3 years). I went to a "Commuter School". No need or desire to live on campus. "Books"... bought them used and really to be honest quit buying half of them about half-way through school.
Supplies I paid for myself and had to be stingy. Laptop? Didn't use one. Tuition, that was all student loans ($17K) that I had to begin paying back when I graduated. In fact I just paid the remaining balance off about 8 months ago.
College has gotten a lot more expensive, of course. My brother goes to the same school and tuition has at least doubled for him. And I only went 6-11 years ago! You have to be very careful with how much you borrow in school. It can add up quickly. I have friends who were taking out loans to buy computers and stuff.
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Alright
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Posted: Fri Oct 3rd, 2008 12:45 am |
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jmcarr wrote: For most Americans, home ownership is still the primary retirement-savings method. Recently, the escalated cost of financing a home caused many Americans' decision to purchase high-risk mortgages, in order to afford an otherwise unattainable house and fulfill the post-war American dream of home ownership.
Using your home as your primary retirement egg would be a bad idea. Use retirement accounts. Tapping into your home equity with a HELOC or "reverse mortgage" is costly and is a terrible idea anyway. Your home is a required utility, and should be considered as such. Mutual funds in a retirement account are not utility, and are therefore easily liquefied into cash.
Mortgages shouldn't be high-risk for the borrower. If they are, then the borrower was irresponsible borrowing too much. Caveat Emptor. Don't let a lender tell you what you can borrow. And if you can't put 10-20% down on a home then you probably should reconsider home ownership. Prove to yourself that you are financially capable before jumping into the costliest purchase of your life.
Home ownership isn't for everyone. Owning a home is expensive and is a huge liability. I think the "American Dream" of owning a home is a bit outdated, and idealistic. In many markets, renting makes more sense than owning. In others, it doesn't. A lot of Americans are brainwashed into thinking they need a home though, and so they buy one for no other reason than to be a part of the homeowner's club.
Think outside the box and try to figure out what is best for you. Often times, going against the grain is the better route.
- Alright
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Coach
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Posted: Fri Oct 3rd, 2008 01:21 am |
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Alright wrote: Mortgages shouldn't be high-risk for the borrower. If they are, then the borrower was irresponsible borrowing too much. Caveat Emptor. Don't let a lender tell you what you can borrow. And if you can't put 10-20% down on a home then you probably should reconsider home ownership. Prove to yourself that you are financially capable before jumping into the costliest purchase of your life.
Home ownership isn't for everyone. Owning a home is expensive and is a huge liability. I think the "American Dream" of owning a home is a bit outdated, and idealistic. In many markets, renting makes more sense than owning. In others, it doesn't. A lot of Americans are brainwashed into thinking they need a home though, and so they buy one for no other reason than to be a part of the homeowner's club.
Think outside the box and try to figure out what is best for you. Often times, going against the grain is the better route. I agree with all of this except the down payment portion. Also, you didn't say only do it if you can handle a 15 year mortgage. I think that's one of Ramsey's biggest flaws. In fact, I say that even if you can handle a 15-yr, take the 30 for greater flexibility. Use your discipline to make regular semi-monthly or extra principal payments, but if there's a special need or emergency, then you're free to skip a month or two stress free. I've been a real estate agent and I always advised against any funky loan products. The furthest I'll go is a 40yr because I consider 30yr to be arbitrary and based on past life expectancy. 40 is the new 30. I once advised a VA buyer not to buy because they ratio was too high. To make it worse, it was a condo at peak market. They couldn't help themselves. Wife was rational but husband was brainwashed and just had to use his benefits, so close we did. Foreclosed within 18 months. Yep, going against the grain can be tough. In most markets, buying a home makes no sense right now because rents have softened. I would only buy an undervalued fixer or an undervalued home in perfect condition. Even then, PITI must be within 133% of comparable rent. Strange times. We should probably all be eating rice and beans, liquidate as much crap as possible and keep gold in a safe at home.
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King
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Posted: Fri Oct 3rd, 2008 01:37 am |
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Alright wrote: Using your home as your primary retirement egg would be a bad idea. Use retirement accounts. Tapping into your home equity with a HELOC or "reverse mortgage" is costly and is a terrible idea anyway. Your home is a required utility, and should be considered as such. Mutual funds in a retirement account are not utility, and are therefore easily liquefied into cash.
Mortgages shouldn't be high-risk for the borrower. If they are, then the borrower was irresponsible borrowing too much. Caveat Emptor. Don't let a lender tell you what you can borrow. And if you can't put 10-20% down on a home then you probably should reconsider home ownership. Prove to yourself that you are financially capable before jumping into the costliest purchase of your life.
Home ownership isn't for everyone. Owning a home is expensive and is a huge liability. I think the "American Dream" of owning a home is a bit outdated, and idealistic. In many markets, renting makes more sense than owning. In others, it doesn't. A lot of Americans are brainwashed into thinking they need a home though, and so they buy one for no other reason than to be a part of the homeowner's club.
Think outside the box and try to figure out what is best for you. Often times, going against the grain is the better route.
- Alright
Predatory lending practice victimize hundreds of thousands of Americans. It is not the our faults to be deceived by the mortgage company. I could have been a victim myself when I bought my home favoring with an adjustable mortgage rate. Who in the world would think that their mortgage payment can go up 50% or more when their ARM increase?Last edited on Fri Oct 3rd, 2008 01:37 am by King
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Alright
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Posted: Fri Oct 3rd, 2008 04:37 am |
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Coach wrote: Alright wrote: Mortgages shouldn't be high-risk for the borrower. If they are, then the borrower was irresponsible borrowing too much. Caveat Emptor. Don't let a lender tell you what you can borrow. And if you can't put 10-20% down on a home then you probably should reconsider home ownership. Prove to yourself that you are financially capable before jumping into the costliest purchase of your life.
Home ownership isn't for everyone. Owning a home is expensive and is a huge liability. I think the "American Dream" of owning a home is a bit outdated, and idealistic. In many markets, renting makes more sense than owning. In others, it doesn't. A lot of Americans are brainwashed into thinking they need a home though, and so they buy one for no other reason than to be a part of the homeowner's club.
Think outside the box and try to figure out what is best for you. Often times, going against the grain is the better route. I agree with all of this except the down payment portion. Also, you didn't say only do it if you can handle a 15 year mortgage. I think that's one of Ramsey's biggest flaws. In fact, I say that even if you can handle a 15-yr, take the 30 for greater flexibility. Use your discipline to make regular semi-monthly or extra principal payments, but if there's a special need or emergency, then you're free to skip a month or two stress free.
You should expect to get a better interest rate on a shorter loan. That is why you would want to lock in the 15-year. But the extra interest charges you pay for the 30 year may be worth it to you to have flexibility of a smaller payment. That is up to each lendee to decide. In this current credit-crunched market, it also may be harder to swing a 30year loan than a 15. There is less risk for the lender the shorter the loan.
- Alright
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Alright
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Posted: Fri Oct 3rd, 2008 04:44 am |
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King wrote: Alright wrote: Using your home as your primary retirement egg would be a bad idea. Use retirement accounts. Tapping into your home equity with a HELOC or "reverse mortgage" is costly and is a terrible idea anyway. Your home is a required utility, and should be considered as such. Mutual funds in a retirement account are not utility, and are therefore easily liquefied into cash.
Mortgages shouldn't be high-risk for the borrower. If they are, then the borrower was irresponsible borrowing too much. Caveat Emptor. Don't let a lender tell you what you can borrow. And if you can't put 10-20% down on a home then you probably should reconsider home ownership. Prove to yourself that you are financially capable before jumping into the costliest purchase of your life.
Home ownership isn't for everyone. Owning a home is expensive and is a huge liability. I think the "American Dream" of owning a home is a bit outdated, and idealistic. In many markets, renting makes more sense than owning. In others, it doesn't. A lot of Americans are brainwashed into thinking they need a home though, and so they buy one for no other reason than to be a part of the homeowner's club.
Think outside the box and try to figure out what is best for you. Often times, going against the grain is the better route.
- Alright
Predatory lending practice victimize hundreds of thousands of Americans. It is not the our faults to be deceived by the mortgage company. I could have been a victim myself when I bought my home favoring with an adjustable mortgage rate. Who in the world would think that their mortgage payment can go up 50% or more when their ARM increase?
Were many lenders predatory? Yes.
But make no mistake about it, it is your responsibility to know what you are signing, and what the implications are. Don't know what an ARM is? Don't sign. Read Homebuying for Dummies.
This is an architects forum. If an owner tells us they don't need handicap spaces for their building we can't just blindly assume they are right because they have a vested interest in the building. Although we aren't error-proof, we should at least attempt to understand the implications of not providing handicap spots. Educate yourself on what an ARM is. Stop blaming the predators. People always have and always will try to get away with as much as they can. This isn't a new concept. Educate yourself, and take guns to the gunfight. 
- Alright
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King
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Posted: Fri Oct 3rd, 2008 05:04 am |
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Alright wrote: Were many lenders predatory? Yes.
But make no mistake about it, it is your responsibility to know what you are signing, and what the implications are. Don't know what an ARM is? Don't sign. Read Homebuying for Dummies.
This is an architects forum. If an owner tells us they don't need handicap spaces for their building we can't just blindly assume they are right because they have a vested interest in the building. Although we aren't error-proof, we should at least attempt to understand the implications of not providing handicap spots. Educate yourself on what an ARM is. Stop blaming the predators. People always have and always will try to get away with as much as they can. This isn't a new concept. Educate yourself, and take guns to the gunfight.
- Alright
Totally disagree.
Imagine yourselves playing Monopoly with a bunch of Pro.
Or
Imagine yourselves playing No-Limit Texas-Hold-Em with a Billionaire with your $10. (not exactly, but you get my idea)
Last edited on Fri Oct 3rd, 2008 02:43 pm by King
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jmcarr
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Posted: Fri Oct 3rd, 2008 02:23 pm |
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Alright wrote: jmcarr wrote: For most Americans, home ownership is still the primary retirement-savings method. Recently, the escalated cost of financing a home caused many Americans' decision to purchase high-risk mortgages, in order to afford an otherwise unattainable house and fulfill the post-war American dream of home ownership.
Using your home as your primary retirement egg would be a bad idea. Use retirement accounts. Tapping into your home equity with a HELOC or "reverse mortgage" is costly and is a terrible idea anyway. Your home is a required utility, and should be considered as such. Mutual funds in a retirement account are not utility, and are therefore easily liquefied into cash.
Mortgages shouldn't be high-risk for the borrower. If they are, then the borrower was irresponsible borrowing too much. Caveat Emptor. Don't let a lender tell you what you can borrow. And if you can't put 10-20% down on a home then you probably should reconsider home ownership. Prove to yourself that you are financially capable before jumping into the costliest purchase of your life.
Home ownership isn't for everyone. Owning a home is expensive and is a huge liability. I think the "American Dream" of owning a home is a bit outdated, and idealistic. In many markets, renting makes more sense than owning. In others, it doesn't. A lot of Americans are brainwashed into thinking they need a home though, and so they buy one for no other reason than to be a part of the homeowner's club.
Think outside the box and try to figure out what is best for you. Often times, going against the grain is the better route.
- Alright
This is very sound advice, especially given the current real estate market. But unfortunately, most Americans will not be accepting your advice. To my knowledge, the majority of Americans rely on their home as their primary retirement asset. Perhaps our culture is too static for savings.
I buck that trend. For the past eight years, I have been contributing generously to my 401k, and will continue to do so, despite the economic downturn. As for my house, I probably should never have purchased it, not because of any lending scam, but because at this time when I want to move, it is difficult to sell, which limits my mobility.
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Coach
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Posted: Fri Oct 3rd, 2008 05:29 pm |
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Alright wrote: You should expect to get a better interest rate on a shorter loan. That is why you would want to lock in the 15-year. But the extra interest charges you pay for the 30 year may be worth it to you to have flexibility of a smaller payment. That is up to each lendee to decide. In this current credit-crunched market, it also may be harder to swing a 30year loan than a 15. There is less risk for the lender the shorter the loan. I don't think that last part matters in approval, it's reflected in the rate difference. And talking about the current credit market is pointless unless we expect it to stay this way. The interest rate is insignificant. If the difference is that important then you probably shouldn't be buying. I'm not saying rates should be ignored, but in real dollars vs risk & flexibility for the borrower, I see little, if any benefit for the typical borrower. I just believe in maximizing flexibility without being stupid. Besides, what does Dave say about interest rates when looking to eliminate debt?
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Coach
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Posted: Fri Oct 3rd, 2008 05:40 pm |
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King wrote: Totally disagree.
Imagine yourselves playing Monopoly with a bunch of Pro.
Or
Imagine yourselves playing No-Limit Texas-Hold-Em with a Billionaire with your $10. (not exactly, but you get my idea) Come on! There are limits to how much we can protect stupid. What kind of moron honestly believed that they could afford a $350K mortgage on $50K per year? And how does that stupid a person manage to make that much? I would love to see more controls but I cannot support bailing out idiot buyers.
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Alright
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Posted: Fri Oct 3rd, 2008 06:23 pm |
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King wrote: Alright wrote: Were many lenders predatory? Yes.
But make no mistake about it, it is your responsibility to know what you are signing, and what the implications are. Don't know what an ARM is? Don't sign. Read Homebuying for Dummies.
This is an architects forum. If an owner tells us they don't need handicap spaces for their building we can't just blindly assume they are right because they have a vested interest in the building. Although we aren't error-proof, we should at least attempt to understand the implications of not providing handicap spots. Educate yourself on what an ARM is. Stop blaming the predators. People always have and always will try to get away with as much as they can. This isn't a new concept. Educate yourself, and take guns to the gunfight.
- Alright
Totally disagree.
Imagine yourselves playing Monopoly with a bunch of Pro.
Or
Imagine yourselves playing No-Limit Texas-Hold-Em with a Billionaire with your $10. (not exactly, but you get my idea)
With what do you disagree? That it's your responsibility to know what you're signing? That you can't read about ARMs in Homebuying for Dummies? That just because someone has a vested interest in something (building owner in their building, mortgage lender in the house), doesn't mean they are responsible or knowledgeable? That people will try to get away with what they can? Seriously, this is everything I've posited. What is worthy of disagreement?
Moving on to your lackluster argument, I would say you don't have to play Monopoly with a pro, or poker with someone who can break you by pushing all in everytime. Just like you don't need to borrow $200,000 from someone when you haven't a clue what an ARM is. (Or the myriad other terms you should fully understand before borrowing 4-years' salary from someone).
Blaming others for your own mistakes isn't going to get you anywhere.
- Alright
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King
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Posted: Fri Oct 3rd, 2008 06:44 pm |
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Alright & Coach:
In reality, Americans are not that smart. I am saying we are not responsible. We are responsible!
However, the government is also responsible for not acting as a watchdog; the mortgage company is responsible for make those load.
Let's not assume we are smart. We are not that smart, but it does not mean we should be out-smart or taken advantage of to a level we owe hundreds of thousand of $.
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Alright
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Posted: Fri Oct 3rd, 2008 06:45 pm |
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Coach wrote: Alright wrote: You should expect to get a better interest rate on a shorter loan. That is why you would want to lock in the 15-year. But the extra interest charges you pay for the 30 year may be worth it to you to have flexibility of a smaller payment. That is up to each lendee to decide. In this current credit-crunched market, it also may be harder to swing a 30year loan than a 15. There is less risk for the lender the shorter the loan. The interest rate is insignificant. If the difference is that important then you probably shouldn't be buying. I'm not saying rates should be ignored, but in real dollars vs risk & flexibility for the borrower, I see little, if any benefit for the typical borrower.
I could also have made the argument that if you can afford to make the 30 year loan's payment, but can't afford the 15 year loan's payment, then you probably shouldn't be buying, either. But I didn't. But now I will. 
I mean $150K (AT) 7% for 30 years yields a $998 monthly payment.
Same loan (AT) 6.5% for 15 years yields a $1,306 monthly payment.
So although your payments are about 30% higher, you are only paying for half the time. If you are in some kind of financial duress, I don't think the $300 extra cash per month is going to really do much for you. I mean $300 is nothing. It shouldn't make or break you. If it does, then you probably should have never bought to begin with.
But I don't think there is anything wrong with getting the 30 and making double payments. As long as you trust yourself and are disciplined enough then you can make it work.
- Alright
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brudgers
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Posted: Fri Oct 3rd, 2008 08:03 pm |
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Alright wrote: I mean $300 is nothing. It shouldn't make or break you. If it does, then you probably should have never bought to begin with.
I pay a fellow $5 to vaccuum my office once a week.
He owns a very modest home and a couple of beaters.
In no small part he keeps showing up because it makes a difference in how he and his disabled wife eat during the week (she's number three, he buried the other two).
Since he was born dirt poor in the delta, didn't finish school, got married at 18, and raised five kids, he's actually doing very well relative to his sharecropper parents (the greatest determinate of socio-economic status).
With an extra $300 bucks a month he probably wouldn't have to work manual labor to suppliment his social security at age 72.
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Alright
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Posted: Sat Oct 4th, 2008 02:05 am |
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brudgers wrote: Alright wrote: I mean $300 is nothing. It shouldn't make or break you. If it does, then you probably should have never bought to begin with.
I pay a fellow $5 to vaccuum my office once a week.
He owns a very modest home and a couple of beaters.
In no small part he keeps showing up because it makes a difference in how he and his disabled wife eat during the week (she's number three, he buried the other two).
Since he was born dirt poor in the delta, didn't finish school, got married at 18, and raised five kids, he's actually doing very well relative to his sharecropper parents (the greatest determinate of socio-economic status).
With an extra $300 bucks a month he probably wouldn't have to work manual labor to suppliment his social security at age 72.
Great story. Nothing wrong with a real-life anecdote to substantiate an argument.
But that guy is likely not the same guy I'm talking about in my $150K mortgage example. I would bet the guy who vacuums your didn't take out a $150K mortgage.
$300/mo. should not make or break the typical American family. If it does, then they have bigger fish to fry, or should be renting in a much cheaper area.
- Alright
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Posted: Sat Oct 4th, 2008 02:11 am |
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King wrote: Alright & Coach:
In reality, Americans are not that smart. I am saying we are not responsible. We are responsible!
However, the government is also responsible for not acting as a watchdog; the mortgage company is responsible for make those load.
Let's not assume we are smart. We are not that smart, but it does not mean we should be out-smart or taken advantage of to a level we owe hundreds of thousand of $.
On the macro level, sure, I suppose I would agree with you. Had the banks and government known (or acknowledged) ahead of time the terrible outcome of years of bad business practice, I'm sure (hoping?) they would have tried to do something better.
But on the micro level it is still each individual's responsibility to fully understand what it is they're signing and the feasibility of repayment.
"We are not that smart". Who? The customers or the bankers? We're all human. The bankers don't theoretically have any intellectual advantage over the customers other than the fact that it's their job to know what you are signing. That's why they had the upper hand all these years, they're no smarter than you or I, but they probably know what the documents mean! You gotta realize, they work 40 hours a week on this stuff.
Most Americans will shop around for 4 hours to save $15 on a couple pairs of jeans, yet when it comes time to buy a $150,000 home, they won't spend nearly the same amount of time, proportionally. To make matters worse, erring when purchasing jeans isn't going to ruin your family's future! Priorities are a good thing!!!
- Alright
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Posted: Sat Oct 4th, 2008 02:40 am |
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Alright wrote: "We are not that smart". Who? The customers or the bankers? | | |
