whats up with the dollar, first time in a long time that the canadian dollar actually traded higher than the american?

Are you worried?

 

im fuggin worried about it. the euro is killing the dollar right now. i got a 68 cent exchange rate today. i got here in june and it used to be 78 cents... congress better up the COLA for germany.

 

This is really a HUGE story!!!! But, no one talks about it for some reason. Fact is, it will get worse before it gets better. Why? Just take a look at the mortgage problem in this country. The US has hit a financial brick wall.

You can't blame congress, you can't blame the president, you have to look at yourself in the mirror.

Stop borrowing money for things you can't afford!!!!!!!!!!!!!!!!!!!!!!!!!

Our economy has been artificially driven for years by people taking loans fo **** they don't need and now can't pay back.

As banks now tighten their belts, the dollar become less desirable.

 

that is the truth.

i think the fact everything is more expencive is part of the issue. I dunno, it always makes more sence to buy a house than to rent. Here in colorado rent/buy is about the same price, however, if you buy some of it goes to equity. if you rent, you hope you can save enough up, but it aint easy to save up 250,000.

Have you seen the new visa commercials? They have all these people moving in almost a dance at a cafeteria, everyone moves are the right time, the whole thing looks like a well oiled machine. People get to the end and swipe, swipe, swipe, swipe, then somebody pulls out cash, things come to a jarring hald, people bumping into other people, brownies are flying through the air, and everyone is pissed cause some asshat decides to pay CASH instead of using his Visa.
"Life takes Visa"
Jesus that commercial makes me sick to my stomache. I always have to rand for a few seconds when i see that commercial. Why use cash? use visa!
Screw that. Cash is about the best way to do anything, because when i use cash VISA is not getting a cut of the purchase.

Another thing that really burns my hide.

Up Front Interest. That should be illegal.

You buy a house, get a 1,500 mortgage payment for a modest home, out of that 1,500 you pay, 250 goes to various fees and taxes. 1000 goes to interest, and out of that 1,500 only $250 goes to paying off the principle.

Hell, i got a 30 yr fixed 5.75% I pay roughly 1,500 a month. It is NOT a big house. It is just expencive to live here.
In 1 year i pay out $18,000 for my house. 3000 goes to the various escrows and ****. and 3,000 goes to the actual principle.

so of course that changes over time, towards the end of the loan yer paying 1000 a month in principle, and 250 in interest per month.

lets say i stick with this house for 5 years and then sell.

That means i have coughed up $90,000
Only roughly 15,000 of that actually goes to the principle.

So i sell the house. After paying 90k, the mortgage company walked out of that deal with 60,000 in thier pocket, and another 15,000 distributed to other financial institutes and taxes.

How the hell do you pay $90,000 and only have 15,000 equity on a 5.75% loan?

If i see this loan to the end......
I will have paid a total of $540,000 for a $225,000 house
I will have shelled out 90,000 for escrow and taxes which somebody else gets.

Ok. That is Bullshit, HOWEVER I would be a little easier to accept that if they would instead of paying all interest up front they would instead calculate it out of the house vs total amount paid.
So my 1,500 payment would be instead broken out to..
624 per month to principle
860 to interest and other fees.
and keep that a flat breakout for all 30 years.

so then right now instead of having about 12-13,000 in equity i would have 30,000 in equity.

AT BEST, a mortgage company will rob you blind.

unfortunatly unless yer independantly wealthy, chances are that is the only way you will ever afford a house.

if i cashed out right now, my 5.75% rate will have been the same as if i had pulled a 500% interest loan for 15,000.

rediculous


Waterdr, yes, we are to blame, but what other choice do we have unless we are independantly wealthy? how else can you ever actually own a house?

the blame falls to us for allowing this to happen, up-front interest in my view should be illegal.

aint much we can do about it is there?

 

the american society is being bombarded constantly to use credit. buy now pay later. i fell into that trap, but I am now working to get myself out by suspending all purchases on credit, and paying things down. I have a long way to go, but I will get there.

i use visa and mastercard, but not as a credit card...as a debit/check card. i do have one credit card, but it's currently in my safe, and Im paying down the balance. if there is no money in my checking account then i just dont buy it.

i recently bought a bunch of mods for my mustang, but i paid for them all with my debit/check card instead of charging them on my credit card. no sense paying interest on that stuff. The car payment itself is enough to drive me nuts, but nothing I can do about that.

property taxes and such are just ridiculous to begin with. all this fixed rate, and variable rate crap is a joke as well. someone ought to step in a regulate interest rates on houses, since houses are becoming so expensive, that the interest rate is fixed, and can't exceed 3% no matter how bad your credit is. but we all know that will never happen.

 

read this thread a few days back..thought about it for a few minutes..that was it..then today went to the casino in windsor canada and it really sank in.......96 cents is what they were giving for an american dollar!!!!!!!!!!!!!!!

 

i was in greece for a month and just got back I gave 1000 dollars and got 710 euros man it sucks really bad

 

The idea of "upfront" interest is really not true. When you take a loan, you must pay interest on the balance your owe. That is how interest is calculated. So, if you borrow $150k for a house, you have to pay interest on the $150k for that month...there is really no way around it. This is how all interest has been charges since the first bank game into existence.

Yes, things cost more. We also feel the need to have more. 20 years ago, we were not paying for TV, internet, radio, and cell phones. Think about it, we get whacked at every turn.

BUT, people are WAY too much in debt. Folks buy cars and houses that can't afford and should not be buying plain and simple. Everyone wants to keep up with the Jones, but Jones is in a downward spiral. Banks have been willing to take risks on people who do this by charging more interest....classic risk vs reward.

No one follows the rules anymore.....and I am talking about the basic financial fundamentals. People buy **** because they somehow think they deserve it..."hey, the bank said yes, so I should."

If your mortage or rent is more then 30% of what you earn, you are too leveraged. If your car loan is more then 5% of what you earn, this too used to be considered too much debt for an auto, but no one seems to give a **** anymore.

Most of the new foreclosures are the result of people who were highly leveraged on their house, had banks who gave very favorable appraisals, and who then took a variable interest loan. Some folks have even taken interest-only loans and there are even loans where you don't even have to pay the full interest due....the balance of the loan increases each month. WTF is wrong with people?

It used to be that a house only got foreclosed because some lost a job or had some sort of financial emergency. Now, people are loosing houses mostly out of their own greed.

 

Now is the time for the financial predators among us to strike while the iron is hot. If you have the financial capacity to do so right, there is a lot of money to be made in making those who've made bad financial decisions regret it for a few more years. Now is the time to run a title service or an escrow company or a foreclosure intervention company.

Water is right though... all the keeping up with the jones' has brought us to this. Nowhere is it more clear than in the SF bay area. More homes are going to be foreclosed on here than probably anywhere else by size. 10's of thousands of people have been buying homes based on a 5-5-10-80 set of mortgages. This means that they have as many as 4 loans on the house, at least of 1 of which is normally an interest only 5 year loan. They've effectively managed to get into a house which they couldn't afford by paying only interest for 5 years, hoping against hope that they can sell for a profit before the 5 year mark comes along and triples their monthly payment.

I know a couple people who've lost their homes to this sort of idiocy and several more that are staring it in the face. That's what happens when you pay $650K for a 1br 1ba 550sq-ft bungalow near the train tracks. (People here actually did that stupid crap).

 

I have made several offers on homes and most sellers and realtors are still in denial. I had one hang up on my realtor as we offered 100k less than the asking price. Both my realtor and I know that the market is heading down back to earth and we need to make sure that our home has equity which is something that sellers dont care about. Sellers are being misguided by the "false market". This was created by a "false demand" by buyers who could not afford traditional loans and or took that inflated homes equity to buy another investment property.

I see homes that sold for 150k in 2002 and now they want 500k in 2007. Owners put some paint fixed up a few things maybe under 50k investment and want 1/2million for it. I laugh at them and those home are still on the market many months later.

Everyone thinks they have a gold mine and Im glad people are losing homes as those home owners plus fly by night mortgage companys are the reason we are in this mess.

Ive gone to see homes in the 600-400k range. There are homeowners that bought it for 160k when communtiy was first made. Ones that sold it when boom first started for 300k then you have the late ones that purchased it for 450k to 500k when boom was at its highest. The late comers want buyers like me to buy that home now for 475-600. The owners that bought for 300k want to sell it high as well since thats what the false market says it should.

The main thing is that money was too easy to borrow and given to individuals that did not have the income to pay it back. Sellers and Realtors have forgotten what income it takes to pay a 1/2 to 3/4 million dollar home. Those people who can afford to actual pay that home dont want to live next to someone who cant so they end up in the same boat as everyone else which is getting a 1million dollar home that they cant afford or not buyng anything.

Ill keep looking for a home that is actually worth the asking price and keep offering 15-20% less than asking price.

 

True Venom and true Redneck.

The denial issue has two sides. If you have your home on the market and can wait, then you have time to be in denial. If you are in a hurry or just need to sell in 60 - 90 days, then, well, you can't afford to be in denial and you can't afford to NOT be in denial either. Either way, you loose.

I bought a house last August. Things were not quite as bad then as they are now, but they were heading south. I sold my house in PA right away, because the relo company bought it (I cheated). That put me in a perfect postion to buy. Imagine that, I could shop knowing my house was sold and I made sure that the sellers new that.

There are deals out there to be be had, but it does not mean that everyone is in a hurry to sell either.

 

Buying stuff you don't need eh? I think we are all guilty of that on here. I'd die without a chin spoiler..

 

I still disagree with upfront interest and feel it should be leveled out to the same amount each month. Mostly just cause that would let me build equity faster. lol.

I bought my house with the intent of buying a home. I have no plans of moving anytime soon. maybe when logan gets in his teens ill think about moving.


Water dr.
As far as the 30% rule, do you mean that before or after taxes? lol.

If after taxes, that would basically mean that unless you make about 110-115k a year in colorado yer over leverged on even a small mortgage(home not condo) is overleveraged. lol.....

my mortgage is definatly less than 30% of my gross income, but is also certainly higher than 30% of my take home.

 

That kind of depends on who who talk to. It used to be 30% of net, but over the years, turned into 30% of the gross. Some banks will let you go 35 or even 40% of gross. You also have to include tax and insurance in that number. I would personally not go over 25%.

I just checked my numbers and I am at 21% with my income and 14% with my wife's. BUT, I have to tell you, I can NOT imagine being at 35% at this point in my life as I would litterally have no money for anything else.

As you earn more money, your income taxes increase too, which makes the ratio even harder to maintain.

So, let's say you use 40% gross for your mortage (plus taxes and insurance), then add 35% for income taxes (Fed, State, and FICA), put 10% in your retirement, that leaves you with only 15% for everything else.....and I mean EVERYTHING (electric, water, car payment, fuel, food, etc.....). This is why I think 40% is WAY too high.

For those of you who live in insanely high cost of living areas, the only way to fix it is to move. My bro lives in LA. He and his wife earn 200k between them. They are young and can not even fathem having kids. They paid $750k for a 900 square foot house, the schools suck, taxes are crazy, and they could never afford day-care and they both need to work to cover the mortage.

 

Well, if i make what i did last year my mortgage is about 23% of my gross income, and 39% of actual take home income from what i make at work. (taxes suck, ive already paid 16,000 in taxes this year. i will have broken 20k by the end of the year. that is with 2 exemptions.

Anyways, if i add on side income, my wifes income, im sitting at about 31% of gross income.

And even then, we have enough to get by and save a little bit, but we have to be pretty diciplined about it.

I'd love to move somewhere cheaper, but the only places i can really get a job at such a high technical level (and pay as well) as i am here would be in california or austin tx.

once everything with logan settles down and he gets his next surgery and things finally start to normalize out we are gonna start working on the wifes career. Get her some more education and see if we cant get her a real career and bump up her earning power a bit.

she just got her first real paycheck since logan was born last week. Now we gotta go through this all again, might not be seeing much from her in the next few months, looks like it is still on me.

 

Jack:

Your situation of kind-of different and you guys are trying to roll with the punches right now. When that happens, it can be darn-near impossible to save money etc... We went through the same thing when my daughter was in the hospital for 6 months. Strange as it may seem, though, we always seemed to have enough as we only did the necessities.

 

Heard on the news this morning (SF Bay Area local hogwash) so far in 2 years 11K of the 30k homes that developers popped into the San Joaquin valley over the last several years have been foreclosed on or otherwise abandoned. So much so that there's a concern about all the abandoned swimming pools stagnating and breeding west nile virus carrying mosquitos. This is what the real estate bubble brought us. The next great plague.

 

Jesus. lol.

The problem is the value of the houses have already been set by the bank. they want thier money or thier property.

too bad.

 

which is exactly why the sort of BS bidding wars we've seen for the last decade had the effect all gambling does. It's nothing but betting on arbitrary values based on an artificial economic factor. After long enough the house always wins. The house is the bank unless you pay cash.