Retrograde
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Tue Apr-04-06 12:49 PM
Response to Reply #15 |
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We bought our first house in 1980 with an ARM initially at 12% (down from 17% a few months previously. Remember rampant inflation in the 70s?) and also had an adjustable mortgage on our current home. For the first one, it was the only way we could buy.
We found a way to make it work to our advantage: we based our payments on the highest rate. E.g., if the rate was lowered from 10% to 8% we continued paying at 10% since that was what we had budgeted for. And if the rate went up to 9% during the next adjustment cycle, we didn't notice. If the rate went to 11% we set that as the new payment level. Got the loan paid off early that way.
It is tempting, when rates drop, to go for the lower payment. But you have to pay one way or another eventually.
Taking equity out of a house for anything other than a catastrophe is something I just don't comprehend.
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| -Some homeowners struggle to keep up with adjustable rates (mortgages) |
RamboLiberal |
Apr-03-06 01:17 PM |
#0 |
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it sure ain't easy |
mdmc |
Apr-03-06 01:18 PM |
#1 |
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Simple rule when buying a house: |
MercutioATC |
Apr-03-06 01:21 PM |
#2 |
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I'm at a loss on this story |
BOSSHOG |
Apr-03-06 01:24 PM |
#3 |
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A lot of people have taken equity out |
Juniperx |
Apr-03-06 01:30 PM |
#5 |
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I know MANY people that have taken their equity out.. |
converted_democrat |
Apr-03-06 06:04 PM |
#27 |
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I do.. |
sendero |
Apr-04-06 11:49 AM |
#52 |
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That's just it... some people have eyes bigger than their wallets |
barb162 |
Apr-05-06 12:50 AM |
#70 |
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We've had to take equity out to pay for our daughter's college education. |
phylny |
Apr-05-06 05:24 AM |
#82 |
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They had to... to pay off bills according to the story |
barb162 |
Apr-05-06 12:42 AM |
#69 |
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hey took the mortgage out on their house two years ago, for |
Dhalgren |
Apr-03-06 01:45 PM |
#8 |
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Modern loansd are MAGIC.. they turn houses into ATMs |
SoCalDem |
Apr-03-06 08:13 PM |
#29 |
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Good for you! |
MercutioATC |
Apr-04-06 02:02 AM |
#36 |
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The surprise of the lenders in your case tells me that the |
barb162 |
Apr-05-06 12:53 AM |
#71 |
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I totally agree |
Juniperx |
Apr-03-06 01:28 PM |
#4 |
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And those you refer to |
BOSSHOG |
Apr-03-06 01:36 PM |
#6 |
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Agreed. Caveat emptor. |
Roland99 |
Apr-03-06 02:14 PM |
#12 |
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5.5%, 30-year fixed... |
LostinVA |
Apr-03-06 05:49 PM |
#24 |
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5.2% 30 year fixed... |
Lenore |
Apr-03-06 08:17 PM |
#30 |
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5.87 30 year fixed. |
Karenca |
Apr-03-06 08:54 PM |
#31 |
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5.0% 30 yr Fixed! nt |
VegasWolf |
Apr-04-06 10:35 AM |
#48 |
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5% 15-year fixed here... |
MercutioATC |
Apr-04-06 01:56 AM |
#33 |
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Exactly -- I qualified for more house, but I got the house I needed |
LostinVA |
Apr-04-06 10:24 AM |
#45 |
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4.125% 15 year fixed. |
LeftHander |
Apr-05-06 11:06 AM |
#91 |
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This is the trap Bush has set for Americans to get their homes |
lovuian |
Apr-03-06 01:39 PM |
#7 |
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This isn't Bush's fault, it's simple economics. |
MercutioATC |
Apr-04-06 02:00 AM |
#35 |
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But the economy is in great shape. I'm sure these two 72&78 yr olds |
FloridaPat |
Apr-03-06 01:51 PM |
#9 |
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New cars? helping the kids? I wisah the story would have |
barb162 |
Apr-05-06 12:57 AM |
#72 |
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Paul Krugman wrote a NYT piece |
madaboutharry |
Apr-03-06 02:03 PM |
#10 |
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The problem is for these folks in trouble |
BlueManDude |
Apr-03-06 03:51 PM |
#17 |
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I remember when I was looking at condos |
CAcyclist |
Apr-03-06 05:07 PM |
#21 |
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I think it's an issue of buyer awareness. |
MercutioATC |
Apr-04-06 02:12 AM |
#37 |
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She WAS ostensibly my buyer's agent |
CAcyclist |
Apr-04-06 03:20 PM |
#62 |
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It's not their responsibility to make financial decisions for you. |
MercutioATC |
Apr-04-06 10:56 PM |
#65 |
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Well said, but people don't seem to be taking responsibility |
barb162 |
Apr-05-06 01:02 AM |
#74 |
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and a lot of people get hit |
superconnected |
Apr-05-06 05:19 PM |
#95 |
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For the record...I think you made the right choice. |
BlueIris |
Apr-05-06 06:06 AM |
#85 |
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Yes, he gave good advice. People look for those low initial |
barb162 |
Apr-05-06 12:58 AM |
#73 |
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My sister & her husband refinance every couple of years |
CrispyQGirl |
Apr-03-06 02:03 PM |
#11 |
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And when people are finally forced to live within their means... |
Juniperx |
Apr-03-06 02:32 PM |
#13 |
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May I suggest you read _nickel and dimed._ |
superconnected |
Apr-03-06 03:57 PM |
#18 |
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I've lived it;) |
Juniperx |
Apr-03-06 05:57 PM |
#26 |
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Seconded! |
Ignis |
Apr-04-06 12:07 PM |
#53 |
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That reminds me of a good book I read |
CAcyclist |
Apr-03-06 05:36 PM |
#22 |
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The Tightwad Gazette by Amy Dacyczn |
missb |
Apr-03-06 05:46 PM |
#23 |
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Thanks! |
CAcyclist |
Apr-04-06 03:12 PM |
#61 |
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And when they end up owing more on the house |
Demobrat |
Apr-03-06 03:48 PM |
#16 |
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Your sister sounds like my sister-in-law. Spend, Spend! |
barb162 |
Apr-05-06 01:04 AM |
#75 |
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In 2005 50% of mortages were ARMS! What a diaster! |
Joanne98 |
Apr-03-06 03:36 PM |
#14 |
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A lot of people are too young to remember the last cycle |
slackmaster |
Apr-03-06 03:57 PM |
#19 |
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They were called balloon notes.. |
AnneD |
Apr-03-06 06:07 PM |
#28 |
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You are so right... |
Tight_rope |
Apr-04-06 12:36 PM |
#55 |
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You're so smart... |
AnneD |
Apr-04-06 01:13 PM |
#57 |
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I remember the Bakersfield Californian created a whole section |
CAcyclist |
Apr-04-06 03:25 PM |
#63 |
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ARMs are bad news for all |
dbackjon |
Apr-03-06 03:45 PM |
#15 |
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In my area, for many people, they were the only way to afford any home. |
superconnected |
Apr-03-06 04:01 PM |
#20 |
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People should be reading the business sections |
barb162 |
Apr-05-06 01:13 AM |
#76 |
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In a very few cases |
Theodolite |
Apr-03-06 09:03 PM |
#32 |
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If rates are falling or you plan to move in 2-3 years, they can make sense |
MercutioATC |
Apr-04-06 01:59 AM |
#34 |
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All except big banks |
slackmaster |
Apr-04-06 09:01 AM |
#38 |
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Not so fast... |
Retrograde |
Apr-04-06 12:49 PM |
#56 |
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ARMs make sense |
laptoprepairguy |
Apr-04-06 02:04 PM |
#59 |
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Not bad news for us. |
phylny |
Apr-05-06 05:30 AM |
#83 |
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Not always |
lumberjack_jeff |
Apr-05-06 12:16 PM |
#92 |
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Refinancing After 45 Years? |
Crisco |
Apr-03-06 05:52 PM |
#25 |
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Yeah! That's what I asked! |
No Exit |
Apr-04-06 09:37 AM |
#39 |
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Yup--they've never had much money.... |
Bridget Burke |
Apr-04-06 11:28 AM |
#50 |
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Wow |
Misunderestimator |
Apr-04-06 09:40 AM |
#40 |
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The Browns refinanced to "pay off some bills"... |
Bridget Burke |
Apr-04-06 09:49 AM |
#41 |
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I wondered if they were medical bills myself |
lastliberalintexas |
Apr-04-06 10:28 AM |
#47 |
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Many retired people also have very high property taxes... |
herbster |
Apr-04-06 01:58 PM |
#58 |
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We paid more than $15K in property taxes last year. |
phylny |
Apr-05-06 05:32 AM |
#84 |
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I know a woman with eighty acres of farmland |
shrike |
Apr-05-06 10:10 AM |
#87 |
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A cautionary tale. |
trogdor |
Apr-04-06 09:56 AM |
#42 |
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I suspect that their credit sucks... |
Mithras61 |
Apr-04-06 10:08 AM |
#43 |
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Or they're old and the lenders wouldn't give them those rates |
lastliberalintexas |
Apr-04-06 10:22 AM |
#44 |
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That could also be the case, certainly... |
Mithras61 |
Apr-04-06 10:41 AM |
#49 |
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Wow, good thing to point out. |
superconnected |
Apr-05-06 05:46 PM |
#96 |
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You can get an FHA with bankruptcy on your credit |
LostinVA |
Apr-04-06 10:26 AM |
#46 |
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Exactly; the fixed rate mortgages were the cheapest in about 50 |
barb162 |
Apr-05-06 01:18 AM |
#77 |
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Now who at DU didn't see this coming!... |
Tight_rope |
Apr-04-06 11:46 AM |
#51 |
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And to think Alan Greenspan was crowing about ARMs. |
Gregorian |
Apr-04-06 11:04 PM |
#66 |
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A LOT of people are gonna get hurt with this. |
davsand |
Apr-04-06 12:36 PM |
#54 |
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I'm quite aware of the impact |
laptoprepairguy |
Apr-04-06 02:13 PM |
#60 |
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Some of us will benifit |
DavidMS |
Apr-04-06 05:30 PM |
#64 |
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How long do you think it will go on this time |
barb162 |
Apr-05-06 01:29 AM |
#81 |
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I can see |
laptoprepairguy |
Apr-05-06 04:44 PM |
#93 |
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I've been seeing the subject discussed in both the real estate |
barb162 |
Apr-05-06 01:20 AM |
#78 |
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Building alternative homes |
womanofthehills |
Apr-04-06 11:28 PM |
#67 |
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My wife and base our choices |
SLCPUNK |
Apr-05-06 12:13 AM |
#68 |
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That's very smart. It's a lot easier on the psyche to have money |
barb162 |
Apr-05-06 01:23 AM |
#80 |
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Good call. Have you read "The Two Income Trap"? |
BlueIris |
Apr-05-06 06:21 AM |
#86 |
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May I ask about zoning laws? Wouldn't straw bale be a super fire |
barb162 |
Apr-05-06 01:21 AM |
#79 |
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Adobe or stucco OVER the straw..practically fire PROOF |
SoCalDem |
Apr-05-06 10:30 AM |
#88 |
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i love earthship and straw bale technology |
faithnotgreed |
Apr-05-06 04:51 PM |
#94 |
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Surprise? |
ramapo |
Apr-05-06 10:30 AM |
#89 |
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I hope they feel dumb....and taken advantage of. |
LeftHander |
Apr-05-06 11:03 AM |
#90 |
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