Cant recall, do you have any plan you like for the mortgages? I’m not sure the best plan to protect the savers like all of us.[/quote]
Actually, I don’t have any plans..I really never do 🙂
.. One of my “hedges” for this mess we’re in (though not done through any sheer intelligence of mine), was to have purchased a home in 2004 and getting out of two other homes. Sorry, I know it doesn’t help answer your question. And I’m going to get a lot of flames started by pointing the following out BUT….
“Our” primary was a “bling” purchase (though trust me, it’s not much of a bling..more like a cardboard box). As I stated before, I never viewed our primary home purchase was never an investment, and I sort of knew I’d eventually be underwater (still waiting to be, actually). But I do enjoy it, I do enjoy putting what we like in it, and frankly I enjoyed building the room for my kid. One regret was, we should have spent a little more at the time and purchased a slightly better home. We played it too conservatively, could have afforded something slightly better. Oh well.
As far as the plan, what I did was took the principle some money from the markets, put it in cashlike assets earning a shitty CD rate, and took out a 30 year loan at 5.5%, and expected by now the CD rate would exceed the loan rate. Drat..BUT, I’m pretty happy now…Why? Because had we not purchased, I probably would have left the principle amount in the stock market indexes, trying to get that 10% returns that so many people quote as what you could get if you rent versus buy…only that I would have been able to buy 40% less house by now, which is where most of my remaining “passive investments allocation” (index funds/201k’s) are doing right now -40% (ok maybe it’s up a bit now, but you get the point).
…..Which, highlighted my second thing I said many times. Sometimes, people(inclusive) think they are doing a smart thing by not spending on something, only to lose even more money doing something else they thought they could do to grow their money and come out even better. I learned this the hard way with a car purchase in 2000, in which I thought I could get ahead by playing in the stock market bubbles. I got burned. I ended up with much less of a car than I originally wanted.
There are some exceptions, some who are astute enough to do the right thing most of the time. I’m not one of them, I admit..And that’s the most important lesson I learned. Admitting my financial limitations. There are a lot of people who post about trading in and out of the stock markets (inclusive). I’m going to be curious who would have better off purchasing a primary and not gambling in the markets and who would have been better off playing in the markets. Not that I disbelieve there are people capable of doing better by playing the markets and renting versus those that just overpay for a home. I’m sure there are some people who will do better….It will just be interesting to see how people will end up. I have no idea what I’m doing in the markets..But, in my particular case, I’m not playing with money that I will be used for a downpayment or principle payment, so I can afford to take losses (to some extent). I am *hoping* I will be right… I am not “depending” on me being right in the short term. That may change in the short term if I lose my job or my significant other loses her job, or both. But, both of us did a pretty good job being conservative spenders. Both of us are still plan to work for about 30 more years.
The only other thing I’m trying to do seriously is talk to the lenders to see if they will modify my loan below 5.5%. I doubt it, not like I’m about to file for foreclosure, nor am I really going to screw up my credit doing so…
There certain areas that’s been correcting more than others, and if you’re interested in those areas…And like I’m telling some of these younger people these days….If you view your primary as a bling purchase, and you can afford it what you want, and your job is pretty stable (relative to everyone else), I’d say go for it. You don’t know what the future holds…. I suspect perhaps Obama and crew are going to start throwing bones at first time home purchases. Don’t know what to expect, but stay tuned.
