- Not My Mother
Boy was I looking for someone to support my delusions in those comments. But mostly they didn't. And 500K is a lot of mortgage. It is a WHOLE LOT of mortgage. And I've found out that shit happens. I could get laid off. Senor Dog is self-employed. If he gets sick, we get no money. If I get laid off again, we have no health insurance. So I understand emergencies now...
But I was still hung up on that dirt in that very small, posh neighborhood. This is my only chance to get in! All of that price is for the land! I'll be next to those mansions!
So I talked to someone smarter than me. I have a friend who is a CFO. Yes, he actually is a CFO. He told me his theory.
He said he thought we have another round of resets coming at the end of 2010-2011. These resets would be for regular Joes with 5 year ARMs who are all going to be underwater. Hmmm...
So, that would drive the dirt down even further. So, we'll rent for a year and reevaluate next year. I'll keep my cash, give mom back the 15K, and not get locked into anything we can't handle.
8 comments:
Good, thought out choice Dog.
You and Dog might want to look into life insurance for Dog. There are some companies that offer a disability rider for small business owners, so if he were to get disabled, you wouldn't completely lose that part of your income. It would probably decrease the death benefit, but since you don't have kids yet, that shouldn't be too much of a concern.
"He said he thought we have another round of resets coming at the end of 2010-2011. These resets would be for regular Joes with 5 year ARMs who are all going to be underwater. Hmmm..."
dog, this theory is based on the fact that ARMS would reset to higher interest rates, thus increasing the mortgage payment and forcing people to forclose, BUT since government slashed interest rates, those ARMS will reset to lower rates, thus lowering monthly mortgage payment, people, see this article http://money.cnn.com/2009/02/05/real_estate/ARM_reset_lower/index.htm, ARMS are adjusting to lower interest rates, next wave of ARM loans reset will not force home prices to go lower
Yes, your CFO friend is probably right, but there is no guarantee that interest rates will stay this low. At some point next year, the government's borrowing is going to exceed their annual GDP, which should cause rates to rise even if the Fed continues to keep the current rate. I'm not an expert on this, but it's something that I've heard from a much smarter colleague.
I have been reading your posts for a while now and I wanted to come out of lurking to give you some support - I think you've been through a great deal the past year and I admire how far you've come.
Those people that are giving you negative comments are forgetting that this is YOUR blog, where you speak about what you're feeling, thinking, or experiencing at the moment. I don't think I have heard you once claim to be a financial advisor, or that your blog should be read for anything other than entertainment.
Basically, keep being yourself and don't let what anyone says deter you from writing and feeling as you wish - I enjoy reading your entries, so cheers girlie!
Will you continue renting where you are now or find someplace else where your cars will be a little more safe? I don't think I could stay in a place where my car kept getting broken into! That would just drive me bonkers.
Sounds like a wise decision, Dog. My comments on the last post are only valid if *you* are comfortable with the level of risk you're taking. You could say the exact same thing about a 200K house, or a 2M one, it all just depends on your situation which is the right deal.
Like you said, shit happens. Could you work out what your outgoings would be on a mortgage like that, and then try to live within a budget as if you were paying that? I know you're socking away shedloads of cash already, but living strictly within that would give you an idea if you could do it, even on a tight month. (And then you'd have even bigger shedloads of cash left over :-)
One of the reasons I really like your blog is you talk about all of this, the ups and downs, even when you know some of your readers are going to flame you. It feels a lot more 'real' than the people who only show you their successes so I also wanted to say thanks and don't change what you're doing.
PS There will always be another good deal :-)
I can see the reasons why that house would be desirable and it may be a great deal for someone but this is definitely not your last chance to move into that neighborhood or one just like it. Look at how far you've come just in the few years since you've started this blog. If you want it, I believe you'll get there someday.
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