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Foreclosures!!

July 27th, 2008 at 06:46 pm

Foreclosures!! That is all they are talking about on the news.

When I was 21, I bought my first house. I worked very hard to pay that house off. Back then there were no IRA's and I had never heard of mutual funds. Of course, I was too poor to pay the stock market, so I saved and pay my house off by age 32.

A lot of younger people on this board don't believe in paying your house off early; they believe they should take any extra money they have and invest it. I totally respect their ideas and understand where they are coming from.

However, I just realized why we have been able to live on low salaries all of our married life, NO MORTGAGE!

When dh and I got married 31 years ago, we were making $12,000 a year combined and that was before taxes.

Most people today are paying out close to 1/3 of their paychecks on the mortgage, PMI, taxes and houses insurance.

I can not imagine having to pay out thousands a month for a house payment.
Best of all, I never have to worry about a foreclosure on my home.

I am not trying to change anyone's mind; this is just what works for me!!

Posted in Uncategorized | 10 Comments »

10 Responses to “Foreclosures!!”

  1. NJDebbie Says:
    July 27th, 2008 at 06:59 pm 1217185169
    1217185169

    I agree with you!

  2. gruntina Says:
    July 27th, 2008 at 07:19 pm 1217186361
    1217186361

    I wish I could do the same as you did. Its too late in the game for me though.

    People think they need more and more money to accomplish things today when in fact your method is more realistic.

  3. mjrube94 Says:
    July 27th, 2008 at 07:50 pm 1217188226
    1217188226

    I just read an article in the paper today that 1 in 200 households in NJ are in the foreclosure process (meaning that they're in default, have been notified that proceedings will start, or are actually being foreclosed on). In Nevada, it's 1 out of 46, and California is 1 out of every 65! I found it unbelievable that it could be so high. We have noticed how many houses are for sale in our town now. It seems like every day new ones are up on the market. Coincidence?

  4. rob62521 Says:
    July 27th, 2008 at 08:33 pm 1217190827
    1217190827

    I also think, Ima, besides you saving and paying for your house, you lived within your means and didn't buy a bigger house than you could afford. If you look at some of the houses some of these folks buy, they are HUGE...big house, big bills. I was reading a syndicated money columnist today and he was talking about the layaway plan...folks saved and waited and anticipated and paid it off and then got the item -- not put it on credit and worry about paying for it later. We couldn't afford to buy our house outright, but we paid extra each month, and when we did inherit a little money, the first thing we did was pay off our house.

  5. Aleta Says:
    July 27th, 2008 at 08:51 pm 1217191883
    1217191883

    You are so right Ima. We had quite a few people including a financial advisor suggesting that we draw money out of our house to invest in the stock market. Of course at that time, (2000), you could throw a dart at just about any fund and make money. Had we done that, we would have been in such a mess today. Not to mention the houses losing value on top of everything. People told us that we would never get ahead the way we were doing our finances. I don't know about you, but it's a great feeling to walk outside and know the ground you are walking on is yours. So, if we had done what we told to, we would have lost our behind in the stock market that year.


    Wealth is not an overnight thing. It's sometimes a slow process. I feel bad because I see neighors moving out and I've been told that their house went into foreclosure. It didn't have to happen but they used their heloc like a piggy bank and kept buying houses to flip them.

  6. gamecock43 Says:
    July 27th, 2008 at 08:52 pm 1217191925
    1217191925

    I am lucky I did not fall in the trap as many of my friends did (not that they are forclosing, but two are dang near close to it). I think if I dated and married a non-baseball player, I would have settled into a mcmansion and been in the middle of this trouble.
    Luckily, I got 'house fever' in the middle of the boom and it has taken me 3 yrs to get a decent downpayment and plan our life around the option ofbuying a home. By now the boom has collapsed and I have the privledge of watching this crisis as an outsider, and I feel I have learned a great lesson.

  7. Myrtle Says:
    July 28th, 2008 at 02:14 am 1217211254
    1217211254

    I agree with you Ima. A house with no mortgage is a great peace of mind!!

  8. boomeyers Says:
    July 28th, 2008 at 04:23 am 1217219019
    1217219019

    I completely agree with you too! And if you have'nt saved enough to get a loan without PMI, save some more and wait until you can!!

  9. helpmefriend Says:
    July 28th, 2008 at 03:26 pm 1217258785
    1217258785

    I would rather own my own house, say that it is mine, and have no fear of anyone taking it away than to make a couple of bucks on my hard earned cash that could be taken away at the drop of a hat.

  10. merch Says:
    July 28th, 2008 at 03:33 pm 1217259198
    1217259198

    One thing people miss about investing vs. paying down the mortgage is discipline. Sure mathematically it makes since to stash extra payments aside and invest it at 9%-12% while you have a 30 year fixed at sub 6%. The issue is that it is extremely difficult to keep your hands off that money for such a long period of time.

    Think of an extra 100k sitting in mutual funds that you pay taxes on the gains every year. Wouldn't it me nice to go on a vacation, buy some nice furniture, redo your kitchen or bathroom, or buy a nicer car?

    If you move towards paying off the mortgage, it's like a retirement account. It saved in a place that you can't get to easily. You need to get a load against the value. And that might be the time for you to say do I want to take out a loan to pay for ____.

    AS Dave Ramsey says, pay off the mortgage; and if you don't like it, you can always get another one.

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