how big of a mortgage will i be able to afford if …….

[SD Realtor]

I agree to each his own… Having kids I choose to leave them valuable assets so I am kind of on board with CBad as well… Again though it is a choice so I respect the other side of the coin…

Pert, I think that when you come here in the spring of 08 it will be a great opportunity for you to sign a 1 year lease and get a feel for what you really want. There is no rush or hurry. Also the longer you can show W2 wages the better it will be for when you do want to apply for a mortgage.

SD Realtor

[(former)FormerSanDiegan]

Like I said, to each their own. This is coming from someone who will have their house paid off at the age of 34. I have plenty invested and I’ll invest plenty more with each of my monthly non mortgage payment.

Owning your home at an early age is one thing. Congratulations on that.
Cashing out a portion of ones retirement savings and paying way too many taxes rather than taking a loan is a completely different scenario altogether.

[(former)FormerSanDiegan]

Like I said, to each their own. This is coming from someone who will have their house paid off at the age of 34. I have plenty invested and I’ll invest plenty more with each of my monthly non mortgage payment.

Owning your home at an early age is one thing. Congratulations on that.
Cashing out a portion of ones retirement savings and paying way too many taxes rather than taking a loan is a completely different scenario altogether.

[CBad]

My parents did it your way. They ended up losing a ton of money in the stock market crash of 87. Then my father lost his job during Aerospace downsizing a couple years later. The result, well, let’s just say I saw the sheriff nailing the foreclosure noticing on the tree out front of the biggest house in the neighborhood: ours. I won’t do that to my kids, period. They will always have a house to live in. Our house is not an investment vehicle whether you find it silly or not.

[CBad]

My parents did it your way. They ended up losing a ton of money in the stock market crash of 87. Then my father lost his job during Aerospace downsizing a couple years later. The result, well, let’s just say I saw the sheriff nailing the foreclosure noticing on the tree out front of the biggest house in the neighborhood: ours. I won’t do that to my kids, period. They will always have a house to live in. Our house is not an investment vehicle whether you find it silly or not.

[patientlywaiting]

cbad’s strategy is safe and sound. It’s like taking out insurance.

Everyone should have a house that is paid off. I’m not talking about a mansion but a modest liveable home. As your income grows and you move up, then sure, use leverage to build wealth but keep one property paid off. That can be a $200k condo somewhere decent.

You then don’t have worries about taking investment risks because you know that your house will always be there to provide you a decent standard of living should things go to shit.

One of my business partners in the 1990s lost his shirt and mc mansion in Laguna Niguel. He never recovered to this day. If you hit bottom, it’s very hard to recover. It happens all the time.

If/when there is an economic depression, a lot of of highly leveraged “rich” people will be out on the street. Maybe not in out lifetimes, but it will happen.

Don’t gamble with the house.

[patientlywaiting]

cbad’s strategy is safe and sound. It’s like taking out insurance.

Everyone should have a house that is paid off. I’m not talking about a mansion but a modest liveable home. As your income grows and you move up, then sure, use leverage to build wealth but keep one property paid off. That can be a $200k condo somewhere decent.

You then don’t have worries about taking investment risks because you know that your house will always be there to provide you a decent standard of living should things go to shit.

One of my business partners in the 1990s lost his shirt and mc mansion in Laguna Niguel. He never recovered to this day. If you hit bottom, it’s very hard to recover. It happens all the time.

If/when there is an economic depression, a lot of of highly leveraged “rich” people will be out on the street. Maybe not in out lifetimes, but it will happen.

Don’t gamble with the house.

[HLS]

CBAD has a valid reason for his fears.
But the true cost is very expensive insurance.

There is such a thing as conservative and there is extremely conservative.

In reality, having a home that is paid off is not necessarily the answer. Having a fixed rate long term loan with cash in the bank to pay that loan off is a safer bet.

Equity isn’t CASH. Never has been and never will be.
Being in the lending biz, I see people with “equity” that is tied up in a stucco box that they cannot get to.

I know of a house that burned down that was free and clear that took years to settle with the insurance company and turned in to a legal battle. The guy was flat broke waiting for his settlement.

Every dollar that gets paid down on a mortgage is a dollar that you may never see again or be able to use in any other way.

There WILL probably be a depression in our lifetimes, probably sooner rather than later.

Many people’s lives are already in a depression. For them, it can’t get much worse. They don’t need the govt telling them that there is a depression, which is another issue.
Based on GDP, economists don’t even agree on exactly what a depression or recession is.
Standard definition of declining stats, but they lie about the stats and then revise the numbers.

When we do have one, most people wont know it, because the current fascination with new terms will be calling it something else. A mild correction, a severe disruption, a conundrum, Irrational exuberance, the terms don’t stop.

87 crash was temporary, not like dot com boom. They must have had some nasty positions.

I don’t recommend highly risky alternatives to paying off a mortgage.

We all have different reasons for doing what we do.

CBAD, I am sorry about what you experienced at a young age.

[HLS]

CBAD has a valid reason for his fears.
But the true cost is very expensive insurance.

There is such a thing as conservative and there is extremely conservative.

In reality, having a home that is paid off is not necessarily the answer. Having a fixed rate long term loan with cash in the bank to pay that loan off is a safer bet.

Equity isn’t CASH. Never has been and never will be.
Being in the lending biz, I see people with “equity” that is tied up in a stucco box that they cannot get to.

I know of a house that burned down that was free and clear that took years to settle with the insurance company and turned in to a legal battle. The guy was flat broke waiting for his settlement.

Every dollar that gets paid down on a mortgage is a dollar that you may never see again or be able to use in any other way.

There WILL probably be a depression in our lifetimes, probably sooner rather than later.

Many people’s lives are already in a depression. For them, it can’t get much worse. They don’t need the govt telling them that there is a depression, which is another issue.
Based on GDP, economists don’t even agree on exactly what a depression or recession is.
Standard definition of declining stats, but they lie about the stats and then revise the numbers.

When we do have one, most people wont know it, because the current fascination with new terms will be calling it something else. A mild correction, a severe disruption, a conundrum, Irrational exuberance, the terms don’t stop.

87 crash was temporary, not like dot com boom. They must have had some nasty positions.

I don’t recommend highly risky alternatives to paying off a mortgage.

We all have different reasons for doing what we do.

CBAD, I am sorry about what you experienced at a young age.

[pertinazzio]

Wowza! Go to lunch and find lots of responses when I get back. Cool………thanks, patientlywaiting, vishon, PSD, HLS, CBad, SD realtor etc. You gave me a lot to think about. There seemed to be some consensus that 250-300 would be about what we could get funded for. It was particularly good to receive this snippet:

“at todays BEST rates FULL DOC you are looking [a] payment of about $600 per $100K [per mo.] for a fully amortized 30 yr fixed….[plus] at least $100 monthly for property taxes per $100K of Purchase price … ”

A couple of more thoughts: I don’t know what our credit score is but I assume its high: we have both been at the same jobs for over 25 years; my wife pays the bills so we are never late (if it were up to inebriated ol’ me to pay them it would be a different story)….I drive beaters and we have just paid off our credit card debts but are keeping the accounts open.

In general I agree that renting may be the best option under today’s conditions. My question however assumed that we would be looking down the road once we are fully in the predicted “trough” when renting might not be such a no-brainer.

Right now I am a pre-geezer. When I actually am “old old” don’t want to have any debt (“solutus omni fenore” means free of all/any debt) but I do want to have big piles of green greasy investments so as to be able leave some security for the one “lost boy” (the other two turned out okay) among the scions of my noble loins and so, god forbid, I might be able to have a couple of swell GFs down in Baja (suena bonito, verdad?) with whom to while away the hours of my disolute senectitude. Just joking ! (or am I?)

I am 56 (or 57, I forget); the rules that apply for 403bs are different or so I am told. Anyhoos supposedly no penalties apply after 55 for me if I want to pull out funds which I don’t want to do but it is nice to know you can. Renting sounds great specially now that we are in a bubble but my nice lady (she’s a hard-working gem, she is) thinks otherwise. If we get 30% declines by 2010 in the preferred zips, we’ll buy and still get to hold onto the nest egg. Thanks to everyone who took the time to respond.

Beatus ille qui procul negotiis … paterna rura bobus exercet suis, solutus omni fenore….. Horace

[pertinazzio]

Wowza! Go to lunch and find lots of responses when I get back. Cool………thanks, patientlywaiting, vishon, PSD, HLS, CBad, SD realtor etc. You gave me a lot to think about. There seemed to be some consensus that 250-300 would be about what we could get funded for. It was particularly good to receive this snippet:

“at todays BEST rates FULL DOC you are looking [a] payment of about $600 per $100K [per mo.] for a fully amortized 30 yr fixed….[plus] at least $100 monthly for property taxes per $100K of Purchase price … ”

A couple of more thoughts: I don’t know what our credit score is but I assume its high: we have both been at the same jobs for over 25 years; my wife pays the bills so we are never late (if it were up to inebriated ol’ me to pay them it would be a different story)….I drive beaters and we have just paid off our credit card debts but are keeping the accounts open.

In general I agree that renting may be the best option under today’s conditions. My question however assumed that we would be looking down the road once we are fully in the predicted “trough” when renting might not be such a no-brainer.

Right now I am a pre-geezer. When I actually am “old old” don’t want to have any debt (“solutus omni fenore” means free of all/any debt) but I do want to have big piles of green greasy investments so as to be able leave some security for the one “lost boy” (the other two turned out okay) among the scions of my noble loins and so, god forbid, I might be able to have a couple of swell GFs down in Baja (suena bonito, verdad?) with whom to while away the hours of my disolute senectitude. Just joking ! (or am I?)

I am 56 (or 57, I forget); the rules that apply for 403bs are different or so I am told. Anyhoos supposedly no penalties apply after 55 for me if I want to pull out funds which I don’t want to do but it is nice to know you can. Renting sounds great specially now that we are in a bubble but my nice lady (she’s a hard-working gem, she is) thinks otherwise. If we get 30% declines by 2010 in the preferred zips, we’ll buy and still get to hold onto the nest egg. Thanks to everyone who took the time to respond.

Beatus ille qui procul negotiis … paterna rura bobus exercet suis, solutus omni fenore….. Horace

[Raybyrnes]

CBad,

Let’s present this another way.

2 scenarios

You live in Louisiana. Are you more comfortable having no payment on your home because you have it paid off but have little or no savings becasue you worked you ass off to pay the home off and reduce the interest expense

Or

You have 300 or 400 k in the bank and a 2K a month payment and you are living in a nice place hurt by the fact that you lost you possession but comfortable with the fact taht you ahve plenty of money to rebuild your life.

People sleep at night with more risk than they think of.

[Raybyrnes]

CBad,

Let’s present this another way.

2 scenarios

You live in Louisiana. Are you more comfortable having no payment on your home because you have it paid off but have little or no savings becasue you worked you ass off to pay the home off and reduce the interest expense

Or

You have 300 or 400 k in the bank and a 2K a month payment and you are living in a nice place hurt by the fact that you lost you possession but comfortable with the fact taht you ahve plenty of money to rebuild your life.

People sleep at night with more risk than they think of.

[CBad]

Um, neither scenario applies to me? My mortgage will be paid off AND we have plenty in guaranteed investments, retirement, 529 plans, and taxable investments. We didn’t sacrifice saving and investing to pay off the mortgage. I would never recommend doing that.

[CBad]

Um, neither scenario applies to me? My mortgage will be paid off AND we have plenty in guaranteed investments, retirement, 529 plans, and taxable investments. We didn’t sacrifice saving and investing to pay off the mortgage. I would never recommend doing that.

[Author]

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