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July 5, 2009 at 11:02 AM #426203July 5, 2009 at 11:36 AM #425466
Zeitgeist
ParticipantGood luck Nancy. I think you are making it yourself by using your good intuition. Don’t forget the chimes, 8 horses and the color red when decorating.
July 5, 2009 at 11:36 AM #425695ParticipantGood luck Nancy. I think you are making it yourself by using your good intuition. Don’t forget the chimes, 8 horses and the color red when decorating.
July 5, 2009 at 11:36 AM #425981ParticipantGood luck Nancy. I think you are making it yourself by using your good intuition. Don’t forget the chimes, 8 horses and the color red when decorating.
July 5, 2009 at 11:36 AM #426050ParticipantGood luck Nancy. I think you are making it yourself by using your good intuition. Don’t forget the chimes, 8 horses and the color red when decorating.
July 5, 2009 at 11:36 AM #426213ParticipantGood luck Nancy. I think you are making it yourself by using your good intuition. Don’t forget the chimes, 8 horses and the color red when decorating.
July 5, 2009 at 3:43 PM #425562CA renter
Participant[quote=patientrenter]Not a bad move, Nancy.
But my bias for 401k alternatives is real assets that produce a steady real income. A home can be rented out. In a world where downpayments are not required (FHA 3% less tax credit) and mortgage rates are held low through government action (FNMA and Fed purchases of MBS etc), and there is no real penalty for walking away when underwater, it will be hard to rent any home that can be easily bought instead. Why would anyone want to rent a single family home that they can buy with little or no commitment and at low monthly cost?
I think we have not yet understood the full long term impact of the Great Bailout. Over the next few years, journalists and financial advisors and individuals will digest what is happening now, and come to realize that buying a home with little or no money down is a huge gift from the federal govt when paired with a plan for ruthless default. People will be buying homes with little or no commitment to paying the purchase price, to an even greater degree than in the last bubble.
Certainly people assigned temporarily to one location would prefer to rent, but the population of people in this situation is steady, and we can’t all make a retirement living by buying more and more homes and renting them to this small slice of our working population.[/quote]
Another good post, patientrenter.
What separated owners from renters in the past was, first and foremost, a hefty down payment. Secondarily, was the good credit score and proof of steady income (which could be waived with a hefty enough down payment, BTW).
The #1 way to prevent another foreclosure “crisis” is to require a minimum 20% down payment. Some exceptions can, of couse, be made for veterans and other people who have earned the exception.
July 5, 2009 at 3:43 PM #425790Participant[quote=patientrenter]Not a bad move, Nancy.
But my bias for 401k alternatives is real assets that produce a steady real income. A home can be rented out. In a world where downpayments are not required (FHA 3% less tax credit) and mortgage rates are held low through government action (FNMA and Fed purchases of MBS etc), and there is no real penalty for walking away when underwater, it will be hard to rent any home that can be easily bought instead. Why would anyone want to rent a single family home that they can buy with little or no commitment and at low monthly cost?
I think we have not yet understood the full long term impact of the Great Bailout. Over the next few years, journalists and financial advisors and individuals will digest what is happening now, and come to realize that buying a home with little or no money down is a huge gift from the federal govt when paired with a plan for ruthless default. People will be buying homes with little or no commitment to paying the purchase price, to an even greater degree than in the last bubble.
Certainly people assigned temporarily to one location would prefer to rent, but the population of people in this situation is steady, and we can’t all make a retirement living by buying more and more homes and renting them to this small slice of our working population.[/quote]
Another good post, patientrenter.
What separated owners from renters in the past was, first and foremost, a hefty down payment. Secondarily, was the good credit score and proof of steady income (which could be waived with a hefty enough down payment, BTW).
The #1 way to prevent another foreclosure “crisis” is to require a minimum 20% down payment. Some exceptions can, of couse, be made for veterans and other people who have earned the exception.
July 5, 2009 at 3:43 PM #426078Participant[quote=patientrenter]Not a bad move, Nancy.
But my bias for 401k alternatives is real assets that produce a steady real income. A home can be rented out. In a world where downpayments are not required (FHA 3% less tax credit) and mortgage rates are held low through government action (FNMA and Fed purchases of MBS etc), and there is no real penalty for walking away when underwater, it will be hard to rent any home that can be easily bought instead. Why would anyone want to rent a single family home that they can buy with little or no commitment and at low monthly cost?
I think we have not yet understood the full long term impact of the Great Bailout. Over the next few years, journalists and financial advisors and individuals will digest what is happening now, and come to realize that buying a home with little or no money down is a huge gift from the federal govt when paired with a plan for ruthless default. People will be buying homes with little or no commitment to paying the purchase price, to an even greater degree than in the last bubble.
Certainly people assigned temporarily to one location would prefer to rent, but the population of people in this situation is steady, and we can’t all make a retirement living by buying more and more homes and renting them to this small slice of our working population.[/quote]
Another good post, patientrenter.
What separated owners from renters in the past was, first and foremost, a hefty down payment. Secondarily, was the good credit score and proof of steady income (which could be waived with a hefty enough down payment, BTW).
The #1 way to prevent another foreclosure “crisis” is to require a minimum 20% down payment. Some exceptions can, of couse, be made for veterans and other people who have earned the exception.
July 5, 2009 at 3:43 PM #426145Participant[quote=patientrenter]Not a bad move, Nancy.
But my bias for 401k alternatives is real assets that produce a steady real income. A home can be rented out. In a world where downpayments are not required (FHA 3% less tax credit) and mortgage rates are held low through government action (FNMA and Fed purchases of MBS etc), and there is no real penalty for walking away when underwater, it will be hard to rent any home that can be easily bought instead. Why would anyone want to rent a single family home that they can buy with little or no commitment and at low monthly cost?
I think we have not yet understood the full long term impact of the Great Bailout. Over the next few years, journalists and financial advisors and individuals will digest what is happening now, and come to realize that buying a home with little or no money down is a huge gift from the federal govt when paired with a plan for ruthless default. People will be buying homes with little or no commitment to paying the purchase price, to an even greater degree than in the last bubble.
Certainly people assigned temporarily to one location would prefer to rent, but the population of people in this situation is steady, and we can’t all make a retirement living by buying more and more homes and renting them to this small slice of our working population.[/quote]
Another good post, patientrenter.
What separated owners from renters in the past was, first and foremost, a hefty down payment. Secondarily, was the good credit score and proof of steady income (which could be waived with a hefty enough down payment, BTW).
The #1 way to prevent another foreclosure “crisis” is to require a minimum 20% down payment. Some exceptions can, of couse, be made for veterans and other people who have earned the exception.
July 5, 2009 at 3:43 PM #426309Participant[quote=patientrenter]Not a bad move, Nancy.
But my bias for 401k alternatives is real assets that produce a steady real income. A home can be rented out. In a world where downpayments are not required (FHA 3% less tax credit) and mortgage rates are held low through government action (FNMA and Fed purchases of MBS etc), and there is no real penalty for walking away when underwater, it will be hard to rent any home that can be easily bought instead. Why would anyone want to rent a single family home that they can buy with little or no commitment and at low monthly cost?
I think we have not yet understood the full long term impact of the Great Bailout. Over the next few years, journalists and financial advisors and individuals will digest what is happening now, and come to realize that buying a home with little or no money down is a huge gift from the federal govt when paired with a plan for ruthless default. People will be buying homes with little or no commitment to paying the purchase price, to an even greater degree than in the last bubble.
Certainly people assigned temporarily to one location would prefer to rent, but the population of people in this situation is steady, and we can’t all make a retirement living by buying more and more homes and renting them to this small slice of our working population.[/quote]
Another good post, patientrenter.
What separated owners from renters in the past was, first and foremost, a hefty down payment. Secondarily, was the good credit score and proof of steady income (which could be waived with a hefty enough down payment, BTW).
The #1 way to prevent another foreclosure “crisis” is to require a minimum 20% down payment. Some exceptions can, of couse, be made for veterans and other people who have earned the exception.
July 5, 2009 at 3:58 PM #425577patientrenter
ParticipantCA Renter, I think you are right about that large (e.g. minimum 20%) downpayment requirement being the single best thing we can do to avoid a repeat of what we’re experiencing now. The article in the WSj recently by Stan Liebowitz outlines the evidence to support this, but it was in my gut years ago.
In fact, I pulled someone aside in my last company’s investment area about 2 years ago to say that they should prepare for much higher mortgage defaults. They responded that the investment folks were making sure that the MBSs they bought were super-senior AAA, with lots of collateral, and they did lots of analysis of the credit of the buyers etc. I recall saying that was fine, but make sure that the CLTV is less than 80%, and avoid over-exposure to CA, FL, AZ, and NV. I just felt that downpayments were the KISS thing to watch.
Until we squeeze out anything with less than 20% down for owner-occupiers, and 30% for others (at least anything from FDIC-insured banks, or FNMA or FHA or other govt support) then we are extremely exposed to a repeat of what we’re now experiencing.
July 5, 2009 at 3:58 PM #425805ParticipantCA Renter, I think you are right about that large (e.g. minimum 20%) downpayment requirement being the single best thing we can do to avoid a repeat of what we’re experiencing now. The article in the WSj recently by Stan Liebowitz outlines the evidence to support this, but it was in my gut years ago.
In fact, I pulled someone aside in my last company’s investment area about 2 years ago to say that they should prepare for much higher mortgage defaults. They responded that the investment folks were making sure that the MBSs they bought were super-senior AAA, with lots of collateral, and they did lots of analysis of the credit of the buyers etc. I recall saying that was fine, but make sure that the CLTV is less than 80%, and avoid over-exposure to CA, FL, AZ, and NV. I just felt that downpayments were the KISS thing to watch.
Until we squeeze out anything with less than 20% down for owner-occupiers, and 30% for others (at least anything from FDIC-insured banks, or FNMA or FHA or other govt support) then we are extremely exposed to a repeat of what we’re now experiencing.
July 5, 2009 at 3:58 PM #426093ParticipantCA Renter, I think you are right about that large (e.g. minimum 20%) downpayment requirement being the single best thing we can do to avoid a repeat of what we’re experiencing now. The article in the WSj recently by Stan Liebowitz outlines the evidence to support this, but it was in my gut years ago.
In fact, I pulled someone aside in my last company’s investment area about 2 years ago to say that they should prepare for much higher mortgage defaults. They responded that the investment folks were making sure that the MBSs they bought were super-senior AAA, with lots of collateral, and they did lots of analysis of the credit of the buyers etc. I recall saying that was fine, but make sure that the CLTV is less than 80%, and avoid over-exposure to CA, FL, AZ, and NV. I just felt that downpayments were the KISS thing to watch.
Until we squeeze out anything with less than 20% down for owner-occupiers, and 30% for others (at least anything from FDIC-insured banks, or FNMA or FHA or other govt support) then we are extremely exposed to a repeat of what we’re now experiencing.
July 5, 2009 at 3:58 PM #426160ParticipantCA Renter, I think you are right about that large (e.g. minimum 20%) downpayment requirement being the single best thing we can do to avoid a repeat of what we’re experiencing now. The article in the WSj recently by Stan Liebowitz outlines the evidence to support this, but it was in my gut years ago.
In fact, I pulled someone aside in my last company’s investment area about 2 years ago to say that they should prepare for much higher mortgage defaults. They responded that the investment folks were making sure that the MBSs they bought were super-senior AAA, with lots of collateral, and they did lots of analysis of the credit of the buyers etc. I recall saying that was fine, but make sure that the CLTV is less than 80%, and avoid over-exposure to CA, FL, AZ, and NV. I just felt that downpayments were the KISS thing to watch.
Until we squeeze out anything with less than 20% down for owner-occupiers, and 30% for others (at least anything from FDIC-insured banks, or FNMA or FHA or other govt support) then we are extremely exposed to a repeat of what we’re now experiencing.
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