Most do not understand how basic finances work and will perpetually make poor financial decisions until they educate themselves.
mortgage bailout
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Most do not understand how basic finances work and will perpetually make poor financial decisions until they educate themselves.
Houses don't get anymore affordable than this one. 50,000 is a lot of money, but you act like I bought a top of the line brand spanking new 350,000 dollar home with stainless steel appliances and a toilet that will wipe my ass for me. lol
I was sitting just fine with a 500/month mortgage, car payment and 1 credit card payment. I did have money saved up at one point. My downfall was due to someone else miscalculating the taxes, thus my underpaying them, thus in turn Chase upping my mortgage 200 a month. Before January when the temperatures hit negative 20 and my setting my thermostat to 68, with the bill still reaching 200 a month (normal was about 100-110). Before January I was able to eat out, go on vacation to Texas and Florida, buy video games and buy shit for the house.
In order to keep up on the mortgage and car payment (the two things I WILL NOT give up right now), I was forced to let a credit card and a loan go to collections.
Its a fucking credit card and a loan that I can negotiate a pay off with them anyway.
I didn't make the mistakes. I made the priorities and I'm suffering the consequences of someone elses mistakes and mother natures' relentless bullshit. So as far as my taking responsibility, in my mind I made the right choices as far as what my priorities are. I don't even want to hear a lecture.
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When it comes to paying 1 vs the other, ALWAYS pay your house first and your car second... having a place to live and a vehicle to get to work is top priority. Plus, those are secured lines of credit (meaning, they can take your house/car back). The other un-secured lines of credit (credit cards, etc) are the ones to skip if absolutely necessary.
This is always the mindset. "I didn't make the mistakes."
You did. Regardless of the cost of the home you bought, you overleveraged yourself. Aka your debt to income ratio was far too great to undertake such a huge financial risk. You could have altered plans and gotten a house six months, a year, six years later, once you had more of a buffer.
...don't say you couldn't do this or that, because there always are options. You may not always like the options, such as renting, etc. but there are options available. It falls on you that you couldn't develop a more creative financial solution.
Again, read Rich Dad, Poor Dad. Hopefully the book is an eye opener for yourself.
Regardless of whether I like or dislike a person, I will always be the first to point out Americans lack of ability to take responsibility.
At the end of the day, you have to look in the mirror and be honest with yourself. Miscalculation? Sure, but you should've had a greater buffer. Cold winter? Should've prepared for what heating bills would be in a winter near your home.
I just got home from getting a ticket. I swore like a banshee. Punched my steering wheel and cut up my hand and was completely irrate after I was written the ticket and not cut a break. At the end of the day, although the cop may have been less leniant than any other cop would have been to a young guy, driving home from work in a suit and tie at 11:15p.m., with no prior points on their record, its my own fault for giving that police officer a reason to pull myself over. I could have altered my actions. Too few people are willing to admit that to themselves, let alone to other people.
Although you will take this personally, don't take it personally James. Its a good character builder if you open your mind and allow yourself to see other perspectives.
//off my soap box.
You don't seem to understand that in buying this house, I didn't overextend myself. In fact, Originally I was paying less to own this home than I was at renting.
At first before my mortgage went from 445, to 505, and then finally to 708 a month I was doing just well. My credit score had only dropped 10 points off 750 after signing my life away for the house.
My mortgage jumping was NOT MY MISTAKE. I don't see how you can possibly sit there and say that it was.
I don't know what else I can say to make you see this. Other than I took a vacation to Texas and Florida, driving the entire way, paid for both times in nothing but cash. Except the one dinner I bought for Jamie.
What I'd like is if realtors would do their fucking jobs correctly.
At first before my mortgage went from 445, to 505, and then finally to 708 a month I was doing just well. My credit score had only dropped 10 points off 750 after signing my life away for the house.
My mortgage jumping was NOT MY MISTAKE. I don't see how you can possibly sit there and say that it was.
I don't know what else I can say to make you see this. Other than I took a vacation to Texas and Florida, driving the entire way, paid for both times in nothing but cash. Except the one dinner I bought for Jamie.
What I'd like is if realtors would do their fucking jobs correctly.
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See this is what you don't understand - this does not change the fact THAT YOU ARE CURRENTLY OVEREXTENDED.
You could have been renting, you could have been snorting coke, you could have been doing anything else prior to the house - that doesn't mean you weren't overextended then, too.
I explained this already. You were purposefully hardheaded and ignored the blatant fact. You should have built a greater buffer. You overextended yourself when you signed on the dotted line. You could have had an account double check the math. You could have run the mortgage calculator yourself. You could have taken 10 other steps that would have put you in a better position. Instead you didn't. Now you feel 100% of the blame is on the other party, it isn't. You signed on the dotted line.
This does not prove anything, it proves that you still don't have a sound financial understanding. I could pay for everything I've bought in cash. Do I? No. I make my money work for me. Instead I have an AmEx card where I receive 5% cash back on my purchases. Furthermore, I get to utilize someone else's capital and float my cash for at least 30 days. That is 30 days longer that I have my money working in the bank, earning more interest while I never have to physically put in any work. I'm receiving a return on my investment without ever having to extend myself or put in any additional effort. This concept is huge. You are also building credit, which seems to be an important concept that you've acknowledged in the past.
Buying everything with cash doesn't mean you're a baller or you're financially capable, it means that you are choosing a less than optimal means to arrive at a destination.
Sure if by paying cash, the seller will knock a percentage off the sale, go ahead and use cash.
I willingly put everyone's trip to Vegas on my credit card, 1) because my friends, although they are similar ages to myself, have not built credit lines large enough that they could even manage to put the entire trip on their card and 2) because I earned a percentage of my money back for swiping a credit card. 3) because I was able to put my friend's money in an interest bearing account from day 1 until day 30 when I needed to pay off the credit card.
You'll say it is not a big deal. What you won't understand is that over a lifetime decisions like my own will make a large difference.
Over a lifetime, Jeffie's decision to refinance will make a large difference.
Over a lifetime, B's decision to collect coins all through his youth into adulthood will make a large difference.
I really stopped caring a while ago, maybe its the alcohol or the fact that I'm tired of everyone telling me I did something wrong. I'll just continue to live my life and continue my plan to be completely, well 99% debt free by 2013.
You want me to pay an accountant to run the numbers and miss the exemptions just like the shithole of a realtor/mortgage company did? Where would I be? Same place. I was never overextended when I bought the house in 2007.
A buffer? You can only buffer so much, at some point its going to run out whether you want to believe that or not.
You keep stating that I'm over extended. I'm not, I'm willing to pay on my credit card, I just choose not to. Yes I am hardheaded, so fuck a multi million dollar credit card company. Fuck them.
I skipped some payments when I could have made them because I just stopped caring. Yeah my credit took a shit, but oh-fucking-well. I don't need it, and I don't want it. I plan on driving the car until it dies, then swapping. I plan on living in this house for a long time.
What the fuck else do I need that has to do with credit? Nothing.
I don't care what Jeffie and B are doing. I'm not Jeffie or B. I'm James, and I work for my cheap, lowball-everything-asshole-father.
You want me to pay an accountant to run the numbers and miss the exemptions just like the shithole of a realtor/mortgage company did? Where would I be? Same place. I was never overextended when I bought the house in 2007.
A buffer? You can only buffer so much, at some point its going to run out whether you want to believe that or not.
You keep stating that I'm over extended. I'm not, I'm willing to pay on my credit card, I just choose not to. Yes I am hardheaded, so fuck a multi million dollar credit card company. Fuck them.
I skipped some payments when I could have made them because I just stopped caring. Yeah my credit took a shit, but oh-fucking-well. I don't need it, and I don't want it. I plan on driving the car until it dies, then swapping. I plan on living in this house for a long time.
What the fuck else do I need that has to do with credit? Nothing.
I don't care what Jeffie and B are doing. I'm not Jeffie or B. I'm James, and I work for my cheap, lowball-everything-asshole-father.
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Listen, a $500/month swing has set you over the edge.
I can call up 10 people and they will say that you were far too leveraged if $500/month pushed you into debt.
Rule of thumb is to have about 2.5times your monthly salary in the bank. 2.5times your monthly salary in the bank should cover at least 4months of an extra $500.
You didn't follow basic rules. Its that simple James.
I know you get defensive and you don't take constructive advice well, but quite honestly, the only thing greater that I can do right now is to slap you in the face and say, "what the fuck are you thinking? how don't you get this concept?"
I can call up 10 people and they will say that you were far too leveraged if $500/month pushed you into debt.
Rule of thumb is to have about 2.5times your monthly salary in the bank. 2.5times your monthly salary in the bank should cover at least 4months of an extra $500.
You didn't follow basic rules. Its that simple James.
I know you get defensive and you don't take constructive advice well, but quite honestly, the only thing greater that I can do right now is to slap you in the face and say, "what the fuck are you thinking? how don't you get this concept?"
READ THE FUCKING BOOK.
Yes. You signed a legal document for a house. Your lawyer should have damn well reviewed the agreement. You would have grounds for a lawsuit had you taken better steps to protect yourself. You chose not to whether you want to admit this fact or not.
You work for money. Money does not work for you.
You chose your path to work for your father.
You are only fucking yourself, not the credit card company. They will get their money and ruin your credit.
You also planned on being able to make your payments. You can't, at least not comfortably. So how then can you tell me you don't need credit?
You don't think things through financially.
Learn from Jeffie, B, and others.
I thought for 3 years on a house. The only things you know are what I tell you, so don't tell me what I thought, think or have done wrong. I bought a house at 24 to settle down, I'm settled and my financial situation can only improve from here on out. I'm paying taxes in SS, which I'll most likely never see back. I'm paying a lot of shit into bullshit taxes with taxes and more taxes raising every day. If you want to bitch about something, write your congressman and tell them to lower everyones taxes.
Shit keeps going up and we'll all be in deep shit. So get off my case.
Besides that I'm busy reading Mein Kampf.
Shit keeps going up and we'll all be in deep shit. So get off my case.
Besides that I'm busy reading Mein Kampf.
I didn't ask for your constructive criticism. I'm taking it with a grain of salt right now... ok ok I'm taking it with a miller lite. So sue me.
I'm doing just fine, yes I'm in debt. But that is temporary. I'm tired of worrying, so I stopped caring. Life is too short to spend all my time now worrying about the future. I'll be fine with my beer and spending all my time getting achievements on my xbox.
...but you're going to give financial advice or at the very least, criticize Jeffie's financial advice, when "life is too short to spend all my time now worrying about the future" is the basis for your argument?
That is the mindset of the type of person who will not get themselves out from under debt because just as the power of compound interest works for you, it works against you.
Funny you mention taxes because one of the main themes of the book is based on the taxes and how the average American works 4 months a year just to cover their annual taxes. They will perpetually be behind and will always be in what the book calls the "rat race".
...but the book would serve of no use to you, right?
I'm not rubbing your nose in your decision, but I am trying to open your eyes to a better solution.
That is the mindset of the type of person who will not get themselves out from under debt because just as the power of compound interest works for you, it works against you.
Funny you mention taxes because one of the main themes of the book is based on the taxes and how the average American works 4 months a year just to cover their annual taxes. They will perpetually be behind and will always be in what the book calls the "rat race".
...but the book would serve of no use to you, right?
I'm not rubbing your nose in your decision, but I am trying to open your eyes to a better solution.
James what is your taxes? Does your state have some stupid high taxes or something? If the taxes were calculated wrong making your payment go up 263 bucks, what was it to start with? that alone is $3000+ a year to cover the difference in taxes.
Did they leave out taxes all together?
Did they leave out taxes all together?
I didn't criticize his advice, I just don't see the point in refinancing everytime you can get .004 knocked off your interest rate. You know what that is called? MY OPINION!!! YAY!!!
lol
If you can live within your means and you've had your house for a whopping year and 12 days, I just don't see the point.
Hell maybe it'll be better for someone in AZ, here I wasn't able to refinance until 1.5 years.
If you paid on a mortgage for 10 years and then refinance another 30 year fixed, you're adding 10 more years to your payments, I don't see how that saves money. But whatever.
Continue to assume I don't contemplate my financial situations through. The problem is there is no way I could have foreseen my taxes being wrong TWO YEARS LATER.
I don't foresee myself retiring, I don't foresee the need for savings. I also don't work for money, I work to work. As much as it'd be nice to sit around playing xbox all day, I'd grow weary of it.
UNDR8D
...has a job!
Then you lack an understanding of basic finance...All you are seeing is the micro...the monthly payments and how long they are going to last. Let the interest work FOR you. If you pay for 10 years then refi into a new 30 year fixed, you can do several things. Allow me to illustrate:
If you borrowed $100,000 fixed at 7% for 30 years:
PMT = $665.30
...and by 2019, your remaining principal balance is $85812.38...more or less
Let's say you refi that amount into a new 30 year fixed under two assumptions:
1. In the 10 years you've been paying your mortgage consistently you have increased you credit score
2. In the same 10 years you have gotten raises, promotions, investments, etc. that have increased your income stream
Now you refi that remaining amount into a new 30 year at a LOWER RATE even though you can afford more...here's where the magic happens
Let's say your bank offers you 5.5% on 85812.38, which you accept. The PMT will be $487.23...However, you know you can comfortably spend $900 a month due to your income level...
You are contributing an extra $412.77 to principal. In this manner your new 30 year fixed that originated in 2019, that would have lasted until 2049 is up in November of........
2029
That's 10 years earlier than the original mortgage that you got in 2009.
Interest paid on a full 30 year amortization at 7% = $139,508.90
Interest paid on a full 30 year amortization of the refi amount = $89,591.59
Interest paid by 2019 on 1st mortgage at time of refi = $65,648.68
Interest paid on abbreviated amortization schedule after making extra principal payments = $27,255.02
Now, assuming that you WERE going to refi in 2019, the plan saved you:
89591.59 - 27255.02 = $62,336.57
That's what I call making home affordable
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wow.. i wish i had that payment ... mine started out at $1113/mo included taxes and insurance.. it jumped to $1452 in January .. (long story, dont feel like telling it).. but i plan on it dropping very soon.. basically we're paying taxes on the old assessment of $315k.. the house got reassessed in May '08 at $150k .. so hopefully next month it'll drop
