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Old 09-03-2007, 01:00 AM   #121
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well that's all crashing down now, isn't it?
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Old 09-03-2007, 01:19 AM   #122
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Originally Posted by kung fu jesus View Post
well that's all crashing down now, isn't it?
The subprime lenders are having to buy back the mortgages they have originated as the foreclosure rates have skyrocketed. This is the reason some of the top subprime lender have gone belly-up. This has even affected Countrywide which is the #1 lender in the country and the #3 (or so) subprime lender.

Lenders across the board have tightened guidelines for ALL types of mortgages for ALL types of borrowers due to the subprime fiasco. This in turn has affected home builders, and the real estate market in general as well as other industries like the auto industry and credit cards.
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Old 09-03-2007, 01:26 AM   #123
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Originally Posted by chuckerants View Post
Interest payment on a mortgage is tax deductible (for most people).

And by the time one has a party, they've ALREADY paid the interest.
I just made a mortgage payment. My payment is $697.00 I paid $4,000. Yes I did pay some interest, but I will have the debt paid sooner, therefore I will pay less in interest over the course of the loan.
My income is tax exempt (mostly) so having interest as a tax deduction doesn’t help me. Knowing my house will be paid in full within 120 days gives me a piece of mind, that an equal amount of money in the bank can not.
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Old 09-03-2007, 01:50 AM   #124
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Hells yes Milton! Not only is my income non-taxable while I'm here but only while I'm in the states does it count towards my income amount on W2. So I'll only have half of my income to pay on next April!
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Old 09-03-2007, 02:26 AM   #125
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Most would say that an education, mortgage, and family vehicle are the only things someone should get in debt for. My parents are great examples of this and they have never used a single credit card and have paid off 4 mortgages. Let's just say that they have the credit to buy about anything they wish. As for me I was stupid with my money when I was younger but built a lot of credit, just too much of it. I had a 750+ score and paid off 3 cars before I was 22. Presently I'm 29 and I only have minimal CC debt on cards I no longer use. I paid cash for both of the Miatas and every mod on them and on my Jeep. I have enough to get by if I didn't work for 6 months and am pretty happy.
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Old 09-03-2007, 02:44 AM   #126
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Originally Posted by chuckerants View Post
Interest payment on a mortgage is tax deductible (for most people).
I never did get to take it off my taxes. My INT was never high enough to do anything but the standard deduction. My first house only cost $42K (30 year mortgage paid off in 12) and the second house was $185K (15 year mortage refi'd for 30 but paid off in 4). We had it down to about $100K the first year (not much in INT payments).

Actually (you investment guys are going to LOVE this), I took a $45K loan on my 401K and paid off my house 3 months ago. So, my house was really paid off 5 years after moving in. I took the 5 year 401K loan in June and have paid off the first 2 years of it so far. So, I have a max of 3 years left on it but am trying to pay it off in 2 years.

Justification for taking the money out of the 401K?
- I was forced to pay off the house in 5 years vs 30 years
- If I lost my job tomorrow I would own my house. Hell, I can pick up cans off of the side of the road and make enough money to live on.
- Even after taking the $45K out of the 401K I still have more in there than most of the guys I work with since I put 20% a year in for many years.
- Once the 401K loan is paid back it will be gravy city. I'll max out the 401K and Roth and the OPTIONS that Chuckerants talks about will be wide open to me. Of course, I'll still be a tight *** bastard and probabably won't enjoy spending money <G>.

Emotionally it was the right thing to do. Financially, the numbers may not add up but I sleep better at night. If your house is paid off you can honestly say **** YOU to your boss and not worry about the consequences. We just had a bunch of layoffs a few months ago and I am not worried at all. The other guys here walk around like zombies because they are scared to death at what the future holds. Not me! It took 20 years of hard work and people telling me I was screwing up but it was worth it.
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Old 09-03-2007, 05:33 AM   #127
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Around here at least, a lot of people bought their house more as an investment than as the place they wanted to live - get leveraged, borrow the max, then sell at a big profit because houses appreciate like crazy(mine has averaged about 14% a year for 10 years).

Well, the appreciation has slowed way down. And you know what? Those never-fail jobs at places like AT&T, Clairol, Duracell, Gillette, Remington, Unilever.......guess they weren't so bulletproof. I have friends who are 55, a couple kids approaching college age, $4000/month mortgage+taxes, and no job. They have decent equity, but not enough to buy another house of any size around here.

I bought my house because we love it and didn't have to stretch, have a 15-yr mortgage and will pay it off in 11 or 12. If I end up 55 and out of work, I won't be ruined.
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