:::RHMT::: Real Home Made Turbo
General Category => General Discussion => Topic started by: RotaryGeek on January 26, 2010, 12:03:30 PM
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When i was 18, i got 2 credit cards. Like any dumbass 18 year old, i maxed them out. I paid on them for a while, then stopped when i was like 20. Now here i am, 4 years later hating myself for it. My credit is shot to shit. I don't have a hope of qualifying for the home loans that i was planning on. I have completely paid off my 2 credit cards, took the settlement offers from them. I also had 3 medical bills from when i almost chopped off my fingers last year. I have paid all but one bill from that. All i have in debt right now is a $300 bill for a sprained ankle from metrodeath hospital that will be paid off on the 29th this month. I applied for the first time homebuying loan, and got denied. So im about to sign a lease for a duplex for me and my girl and baby till i can boost my credit. Problem is, nobody will give me a credit card to start building it. I don't blame them, with my past history i can see how they would not want to take a risk on me. But i do need a card to start out with again. I have applied for a walmart card, and im still waiting to see if they approve or deny me. But if i get denied, ill need to get a card from somewhere. I don't really have the extra money to dump into a secured card, but if i absolutely have to, i can put some of my tax refund into a secured card, but i won't really be able to add much to it monthly, maybe like $50 a month. So what do you think i should do?
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credit cards don't show up on credit reports unless you don't pay em. Same with closed accounts. never close em just leave em hanging out and slice the card up.
The answer isn't clear cut, do you need a car? if you want credit id tell you to go get a loan on one and pay it off. Small loans will help but not as much as an "Auto loan" and you have a higher chance of fucking yourself if you loan 4 grand to yourself for 6 months for the purpose of "Building credit" you will end up with a turbo car and lots of drunken nights and a huge loan bill. that's stupid.
you want credit best and quickest is to buy a car or house really. I didn't have dick for credit really before i bought my house now im knocking on like 700 i think and have had it for like 4 years. like i said though i didn't have shit for credit before that, no car loans, no small loans, just small credit cards.
Cray91 had good advice on this last time there was a thread on it.
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Go to your bank and get a revolving credit account.
Pay on it for 2 full years to show good payment history.
Bump around this site to learn about your FICO score and how to improve it.
http://ficoforums.myfico.com/fico/ (http://ficoforums.myfico.com/fico/)
http://ficoforums.myfico.com/fico/board/message?board.id=ficoscoring&thread.id=29793 (http://ficoforums.myfico.com/fico/board/message?board.id=ficoscoring&thread.id=29793)
Also use the search button in here because we had one or two thread like this that had more info. :yes:
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Go to your bank and get a revolving credit account.
Pay on it for 2 full years to show good payment history.
Bump around this site to learn about your FICO score and how to improve it.
http://ficoforums.myfico.com/fico/ (http://ficoforums.myfico.com/fico/)
http://ficoforums.myfico.com/fico/board/message?board.id=ficoscoring&thread.id=29793 (http://ficoforums.myfico.com/fico/board/message?board.id=ficoscoring&thread.id=29793)
Also use the search button in here because we had one or two thread like this that had more info. :yes:
Good payment history = Nothing. meaning there wont be a single thing on it unless you fail to pay someone. Doesn't tally how many on time payments you've had to places, only the places that never received payment from you.
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I don't think you should be super bummed about not getting a home loan. Houses aren't fantastic investments that people make them out to be unless you think short term 2-5 years. Past that point, interest, taxes, ect ect ect really make it sometimes more expensive than renting and once you go and sell the house you aren't in any better fiscal circumstance. There are circumstances and arguments both ways suggesting buying a home is better or renting is better. So don't get too bummed.
The best thing to do is rent a place less than you'd pay on just the mortgage. Take the assumed difference, and save it away into a savings account or mutual fund. Something liquid. Then just live life as a fiscally conservative person for the next 2-5 years. At the end of that time, you should have money in the bank and a good 2-5 years of sound credit history. They can't hold what you did as an 18 year old against you forever. You need to show a history of good spending. If you can manage 5+ years of it, you will be okay.
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Econobox, that's not entirely correct about the credit history thing... Some things will only show up when you fail to pay, however out of the 3 credit cards I've had, and few loans I've had, they all have reported monthly. Most credit card companies report, but it doesn't hurt to ask "will this be reported to all 3 credit bureaus monthly."
- www.creditboards.com (http://) has a lot of good information on clearing up fuckups and building credit, someone mentioned it on the thread on ohmt
- Orchard Bank prepaid credit card. Most of these are scams with ridiculous fees and some don't report. I've used my Orchard Bank one for 2 years now and they've reported every month and don't make you pay an activation fee or any fee. You sign up, send them the amount you want to "prepay", and you'll get a card with that much on it. Shows up as a credit card, and you can get one no matter what your credit is. Once you close the card, you get your money back with interest.
- Card utilization - don't max out any cards that you may have, even if you pay it monthly. Best thing to do is have a bunch of cards that you barely use. If you don't use them, it is bad for your credit, and if you max them out it won't help much. Use them but use a small percentage of each card. I don't think anyone knows what a good percentage to use is, since they vary depending who you ask, but just use a small amount, maybe 25% of each card, and pay it back.
- Get a loan - get any kind of loan you can for anything (as long as you can pay it back). Even if you get a $500 signature loan and can pay it back immediately...make the scheduled payments to build a credit history.
- Jewelry store - they love to give credit cards. First one I ever got was at a jewelry store when I was a teenager. Bought a watch and paid them back as scheduled.
There's a whole bunch of shit you can do to build credit. Check out creditboards.com and read around, mostly the n00b guides.
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The rep at the mortgage company was schooling me a little bit on how to bump my credit. She said that the best and maybe only thing i can do at this point is to open a credit card account and make monthly payments above the minimum. Nobody will give me a loan for anything right now. And since i have a girl and a kid now, its a little expensive. If it helps i can break down my monthly income to see what i could actually afford.
I get paid $1850/month
$450 rent
$200 elec (? haven't seen a bill yet cuz im still waiting to activate it)
$60-100 water (? again i don't know for sure yet, guessing a little high to be safe)
$100 insurance
$150 phone
$300 groceries (+/- about 50 depending on the month. We only buy groceries once a month, but small trips to walmart kill me.)
So thats a 1k right there, should have like$850 a month left. But it all disappears quick. I drive 35 miles to work 6 days a week, so thats like $30 in gas a week, my girls gas, smokes (we are both quitting as soon as we move to the new house) and other misc shit. And on payday we always go out to eat at like genghis grill or chopticks for some good pho... The rest is just misc shit we need for the house and eating out. We have to stop doing that.
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we are both quitting as soon as we move to the new house
Haha, good luck with that (seriously). I've said "I'm quitting as soon as _____" for the past few years. Hope you guys do thought, a pack or two a day gets expensive.
I was a couple points from being eligible for a home finally, had to raise it almost 100 points and did so within a year and half using info from creditboards...then became unemployed and it's back in the shitter :(
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Well i quit last year before my birthday, and this last trip to vegas a week ago was too much for me so i started again. I had quit for over a year before that using chantix. She had quit too but recently started again. And the VA has been sending my dad Buproprion in big ass bottles to get him to quit and he never takes it so thats what im gunna use this time. That should save alot of money.
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The rep at the mortgage company was schooling me a little bit on how to bump my credit. She said that the best and maybe only thing i can do at this point is to open a credit card account and make monthly payments above the minimum. Nobody will give me a loan for anything right now. And since i have a girl and a kid now, its a little expensive. If it helps i can break down my monthly income to see what i could actually afford.
I get paid $1850/month
$450 rent
$200 elec (? haven't seen a bill yet cuz im still waiting to activate it)
$60-100 water (? again i don't know for sure yet, guessing a little high to be safe)
$100 insurance
$150 phone
$300 groceries (+/- about 50 depending on the month. We only buy groceries once a month, but small trips to walmart kill me.)
So thats a 1k right there, should have like$850 a month left. But it all disappears quick. I drive 35 miles to work 6 days a week, so thats like $30 in gas a week, my girls gas, smokes (we are both quitting as soon as we move to the new house) and other misc shit. And on payday we always go out to eat at like genghis grill or chopticks for some good pho... The rest is just misc shit we need for the house and eating out. We have to stop doing that.
it sounds like the girlfriend needs a job
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The rep at the mortgage company was schooling me a little bit on how to bump my credit. She said that the best and maybe only thing i can do at this point is to open a credit card account and make monthly payments above the minimum. Nobody will give me a loan for anything right now. And since i have a girl and a kid now, its a little expensive. If it helps i can break down my monthly income to see what i could actually afford.
I get paid $1850/month
$450 rent
$200 elec (? haven't seen a bill yet cuz im still waiting to activate it)
$60-100 water (? again i don't know for sure yet, guessing a little high to be safe)
$100 insurance
$150 phone
$300 groceries (+/- about 50 depending on the month. We only buy groceries once a month, but small trips to walmart kill me.)
So thats a 1k right there, should have like$850 a month left. But it all disappears quick. I drive 35 miles to work 6 days a week, so thats like $30 in gas a week, my girls gas, smokes (we are both quitting as soon as we move to the new house) and other misc shit. And on payday we always go out to eat at like genghis grill or chopticks for some good pho... The rest is just misc shit we need for the house and eating out. We have to stop doing that.
How do you honestly think you can afford a mortgage with that amount of bill and only $1850/month income?
And people wondered how so many Americans got in over their head and foreclosed on their home...
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I'm glad you both said it before me, because that is definitely the case. Granted, I live in NJ, but I was making more than that at my first real job, living at home with only basic expenses, and I felt poor after every pay check. I'd say I banked about 85% of the paycheck too. I just knew the money wouldn't carry far enough to buy/rent, with real full expenses.
Your GF needs a job or you need a better job. IIRC, you are a prison guard. Maybe you should move into private security. I believe the money is a lot better and the job is safer/easier.
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She is a full time mom, if she doesn't want to get a job, i won't make her. We are living ok on what i make, but extra income is always nice. We were only looking at homes about 50-60k with monthly mortgage of about what im paying in rent. It would be a starter home, live there a couple years and buy a bigger home when i can afford more. I make decent money for the area im in. About 4k more/year than the average family. Plus all our insurance comes right out of my check before i ever get it. So i don't have to worry about health or any of that stuff. And as of now, they are taxing me at 0 dependents, so next month $1850 should go up a decent amount when i switch it to 3 dependents.
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with monthly mortgage of about what im paying in rent
What about property tax? As well as all the other bills that you don't see as a renter?
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Im not sure about property taxes in texas, but it shouldn't be too bad. I used a mortgage calculator a few times and found out i could afford a 70k house, but decided to go with a 50-60k so we had some extra money. But since that fell threw we will just rent while i work on my credit and try again later. Kinda blows cuz i was looking forward to owning a home, but oh well.
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I don't think you should be super bummed about not getting a home loan. Houses aren't fantastic investments that people make them out to be unless you think short term 2-5 years. Past that point, interest, taxes, ect ect ect really make it sometimes more expensive than renting and once you go and sell the house you aren't in any better fiscal circumstance.
Uh, when you go to sell most homeowners end up breaking even. Where I live, they made a few tens of thousands of dollars. Renters are throwing their money down the drain.
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I don't think you should be super bummed about not getting a home loan. Houses aren't fantastic investments that people make them out to be unless you think short term 2-5 years. Past that point, interest, taxes, ect ect ect really make it sometimes more expensive than renting and once you go and sell the house you aren't in any better fiscal circumstance.
Renters are throwing their money down the drain.
Shhhhhh. My dad has a rental right now that's paying the mortgage, insurance, taxes, and about 150/month profit.
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make that bitch get a job, she cant be no freeloading ho just cuz she popped out a little cracker round eye chillun. BITCH YOU BEST GETS TA WERKIN THAT CORNUH! thats what you oughta tell that bitchass hoe
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I don't think you should be super bummed about not getting a home loan. Houses aren't fantastic investments that people make them out to be unless you think short term 2-5 years. Past that point, interest, taxes, ect ect ect really make it sometimes more expensive than renting and once you go and sell the house you aren't in any better fiscal circumstance.
Uh, when you go to sell most homeowners end up breaking even. Where I live, they made a few tens of thousands of dollars. Renters are throwing their money down the drain.
There is a lot of discussion about renting vs owning currently in the news/economic world. There are several cases where renters are able to spend less annually. Then given they have savings, they are able to put it in an interest bearing account, and the growth on that money is more than the money you will gain by owning a house. Now, I don't believe that works all the time, but it does sometimes. In the evaluations, typically you are not comparing apples and apples. If someone rents, its typically a smaller home/apartment than what they end up buying(except city dwellers). So by changing the variables, the evaluation is no longer necessarily applicable.
Did I use enough language to make my point clear that renting vs owning is on a case by case basis?
Link: http://finance.yahoo.com/tech-ticker/home-economics-the-hidden-costs-of-the-'american-dream'-409285.html?tickers=REZ,IYR,XHB,HD,LOW,DHI,PHM (http://finance.yahoo.com/tech-ticker/home-economics-the-hidden-costs-of-the-'american-dream'-409285.html?tickers=REZ,IYR,XHB,HD,LOW,DHI,PHM)
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I want to check my score, but I don't want to enroll in some "free" program that I have to cancel. Isn't there a site that'll let you check your score once a year and not enroll in any BS?
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I don't think you should be super bummed about not getting a home loan. Houses aren't fantastic investments that people make them out to be unless you think short term 2-5 years. Past that point, interest, taxes, ect ect ect really make it sometimes more expensive than renting and once you go and sell the house you aren't in any better fiscal circumstance.
Uh, when you go to sell most homeowners end up breaking even. Where I live, they made a few tens of thousands of dollars. Renters are throwing their money down the drain.
There is a lot of discussion about renting vs owning currently in the news/economic world. There are several cases where renters are able to spend less annually. Then given they have savings, they are able to put it in an interest bearing account, and the growth on that money is more than the money you will gain by owning a house. Now, I don't believe that works all the time, but it does sometimes. In the evaluations, typically you are not comparing apples and apples. If someone rents, its typically a smaller home/apartment than what they end up buying(except city dwellers). So by changing the variables, the evaluation is no longer necessarily applicable.
Did I use enough language to make my point clear that renting vs owning is on a case by case basis?
Link: http://finance.yahoo.com/tech-ticker/home-economics-the-hidden-costs-of-the-'american-dream'-409285.html?tickers=REZ,IYR,XHB,HD,LOW,DHI,PHM (http://finance.yahoo.com/tech-ticker/home-economics-the-hidden-costs-of-the-'american-dream'-409285.html?tickers=REZ,IYR,XHB,HD,LOW,DHI,PHM)
This is silly. will you monetarily come out ahead well sorta, but you own nothing when its all said and done. Its just like leasing a vehicle. sure its cheaper you could save money but after the 3 years are up you own nothing, therefore have nothing to put towards another car except what you have saved.
Looks good on paper but rarely works out that way.
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I want to check my score, but I don't want to enroll in some "free" program that I have to cancel. Isn't there a site that'll let you check your score once a year and not enroll in any BS?
I think if you go directly to the bureau's website...ie transunion.com, experian.com, etc, that you can get it for free once a year.
Dunno.
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install a turbocharger.
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I don't think you should be super bummed about not getting a home loan. Houses aren't fantastic investments that people make them out to be unless you think short term 2-5 years. Past that point, interest, taxes, ect ect ect really make it sometimes more expensive than renting and once you go and sell the house you aren't in any better fiscal circumstance.
Uh, when you go to sell most homeowners end up breaking even. Where I live, they made a few tens of thousands of dollars. Renters are throwing their money down the drain.
There is a lot of discussion about renting vs owning currently in the news/economic world. There are several cases where renters are able to spend less annually. Then given they have savings, they are able to put it in an interest bearing account, and the growth on that money is more than the money you will gain by owning a house. Now, I don't believe that works all the time, but it does sometimes. In the evaluations, typically you are not comparing apples and apples. If someone rents, its typically a smaller home/apartment than what they end up buying(except city dwellers). So by changing the variables, the evaluation is no longer necessarily applicable.
Did I use enough language to make my point clear that renting vs owning is on a case by case basis?
Link: http://finance.yahoo.com/tech-ticker/home-economics-the-hidden-costs-of-the-'american-dream'-409285.html?tickers=REZ,IYR,XHB,HD,LOW,DHI,PHM (http://finance.yahoo.com/tech-ticker/home-economics-the-hidden-costs-of-the-'american-dream'-409285.html?tickers=REZ,IYR,XHB,HD,LOW,DHI,PHM)
This is silly. will you monetarily come out ahead well sorta, but you own nothing when its all said and done. Its just like leasing a vehicle. sure its cheaper you could save money but after the 3 years are up you own nothing, therefore have nothing to put towards another car except what you have saved.
Looks good on paper but rarely works out that way.
I don't think the guy is 100% valid/accurate but he has points. Renting allows a certain amount of freedom both fiscally and from responsibility. After your lease is up, you can move anywhere you want. You also don't have your savings/retirement/future tied up in an asset that is not easy to liquidate. If you want money out of stocks, you sell em the next day.
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I want to check my score, but I don't want to enroll in some "free" program that I have to cancel. Isn't there a site that'll let you check your score once a year and not enroll in any BS?
I think if you go directly to the bureau's website...ie transunion.com, experian.com, etc, that you can get it for free once a year.
Dunno.
This is true. Also freecreditreport.com will also poll it but they give you one or the other. You pick either a history or your score. Wifey works for Equidata so free credit report.com basically uses them to pull credit reports.
FWIW i would pick history cause if you have Dings onit you will see what they are and can act accordingly. your score you wont know if there are bad things or good things on it. If you know you don't have much then you want to eliminate the bad shit as much as possible, knowing your score per se might not help as much since you already know it wont be very high.
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Renting allows a certain amount of freedom both fiscally and from responsibility. After your lease is up, you can move anywhere you want. You also don't have your savings/retirement/future tied up in an asset that is not easy to liquidate. If you want money out of stocks, you sell em the next day.
Uh, do you know how much it fucking sucks to move or have to look for a new place? You don't, you live in your parent's basement. And comparing REAL property of REAL value with a piece of paper whose value fluctuates with the market assures you that while you can "get money out of them" quicker you aren't guaranteed to have made any money by doing so.
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Come to Canada. Credit score doesn't exist.
Renting allows a certain amount of freedom both fiscally and from responsibility. After your lease is up, you can move anywhere you want. You also don't have your savings/retirement/future tied up in an asset that is not easy to liquidate. If you want money out of stocks, you sell em the next day.
Uh, do you know how much it fucking sucks to move or have to look for a new place? You don't, you live in your parent's basement. And comparing REAL property of REAL value with a piece of paper whose value fluctuates with the market assures you that while you can "get money out of them" quicker you aren't guaranteed to have made any money by doing so.
Next time I move I hope it will be for at least 20 years... I hate to move....
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Come to Canada. Credit score doesn't exist.
Renting allows a certain amount of freedom both fiscally and from responsibility. After your lease is up, you can move anywhere you want. You also don't have your savings/retirement/future tied up in an asset that is not easy to liquidate. If you want money out of stocks, you sell em the next day.
Uh, do you know how much it fucking sucks to move or have to look for a new place? You don't, you live in your parent's basement. And comparing REAL property of REAL value with a piece of paper whose value fluctuates with the market assures you that while you can "get money out of them" quicker you aren't guaranteed to have made any money by doing so.
Next time I move I hope it will be for at least 20 years... I hate to move....
Do Canadians have a credit score system?
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As far as I know we don't have credit score with number related to it. Pay your bills, use your credit card and you have a perfect "score"...
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Renting allows a certain amount of freedom both fiscally and from responsibility. After your lease is up, you can move anywhere you want. You also don't have your savings/retirement/future tied up in an asset that is not easy to liquidate. If you want money out of stocks, you sell em the next day.
Uh, do you know how much it fucking sucks to move or have to look for a new place? You don't, you live in your parent's basement. And comparing REAL property of REAL value with a piece of paper whose value fluctuates with the marassures you that while you can "get money out of them" quicker you aren't guaranteed to have made any money by doing so.
people buy these "starter houses" thinking they will live in them for a few years and then sell for profit. it dont work like that unless you buy a house on the cheap in a bad economy and sell when shit goes back up. the first 10 years on a loan youre not paying shit towards the principle so your basically paying rent for all intents. i looked at my buddies mortgage statement he got this year. he paid 8900 in interest, 4700 in property tax and only $890 came off the principle.so he bought the house for 164K and after a year of $1300/mo mortgage payments he still owes 163K.
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The truly FREE credit report site
https://www.annualcreditreport.com/cra/index.jsp (https://www.annualcreditreport.com/cra/index.jsp)
You are allowed to hit each of the three agency's once a year.
I haven't done mine since 2007. Due to Ohio statute of limiations debt after 5 years in considering "non-collectible" and they can't try to get it with a lien or garnish my wages.
I was fired 11/2004.......
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Renting allows a certain amount of freedom both fiscally and from responsibility. After your lease is up, you can move anywhere you want. You also don't have your savings/retirement/future tied up in an asset that is not easy to liquidate. If you want money out of stocks, you sell em the next day.
Uh, do you know how much it fucking sucks to move or have to look for a new place? You don't, you live in your parent's basement. And comparing REAL property of REAL value with a piece of paper whose value fluctuates with the marassures you that while you can "get money out of them" quicker you aren't guaranteed to have made any money by doing so.
people buy these "starter houses" thinking they will live in them for a few years and then sell for profit. it dont work like that unless you buy a house on the cheap in a bad economy and sell when shit goes back up. the first 10 years on a loan youre not paying shit towards the principle so your basically paying rent for all intents. i looked at my buddies mortgage statement he got this year. he paid 8900 in interest, 4700 in property tax and only $890 came off the principle.so he bought the house for 164K and after a year of $1300/mo mortgage payments he still owes 163K.
It only works like that if you know what you are doing, and whatever meme this "starter house" shit is it originated in a real estate or advertising office. I know guys buying houses for $70K, dropping $15K and a month's work on them, and flipping them for $130K+ within 6 months - or they were before the economy dipped. Now they are trying to snag cheap repos and distress sales, sit on them until the market heals itself.
They aren't making any more land, the population will continue to skyrocket until a little after 2040, and so prices will continue to go up. It makes sense to invest in real estate, even if it's only your own house. Just because people are going out and paying too much because they don't know what they are doing in no way invalidates the premise.
Also, haven't you heard of making a minimum of one extra payment per year and directing that towards the principle? The idea's there for a reason, and bitching about how mortgages distribute money between interest and principle is kinda dumb when they teach us dumb Southern hicks how to calculate it in middle school. Just because some people are fucking dumb doesn't mean the basic idea isn't sound. :mexi:
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You just explained buying houses as short term investments, not buying houses to live in.
Buying a house is like putting all of your money in a 25 year CD. It's typically low risk. You make some money off of it at the end of the period. The issue is its illiquid and isn't using your money to the fullest potential.
Buying a house is a good investment on a case by case basis. Saying otherwise is insane. I'd personally own, because land lords are overwhelmingly horrible to deal with, but it doesn't discredit the point that renting can be more fiscally logical and better in a lot of circumstances.
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______ is a good investment on a case by case basis.
Correct.
I'd still pay mortgage over rent, any day of the week.
I was paying $640/mo for a 2br/2ba nice apartment (one of the more expensive ones here).
Plenty of 3br/2ba/garage brick homes go for sale here that would end up giving me a ~$700/mo mortgage, putting nothing down.
If my credit score was at a point that I could get a house, I would not be paying rent.
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You were denied the mortage because your income to debt ratio is too high. They used to let you get away with up to 50%, but now if your more than 31% you have no chance regardless of credit. They deemed you too high a risk, and for good reason. You have no safety net. What happens if you break your leg? Medical bills + reg bills = you no pay your house payment. You see where im going with this? Hell, you can file for chapter 13 bankruptcy if you have less than $500 left over after paying all your bills every month. I'd say most of the ppl on this site qualify for it.
Good luck quiting smoking. My grandfather smoked for 50 YEARS, was told he has 2 kinds of cancer and emphisima (spelling?) and quit cold turkey, hasnt picked em up in 5 years. Its all about will power.
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Renting allows a certain amount of freedom both fiscally and from responsibility. After your lease is up, you can move anywhere you want. You also don't have your savings/retirement/future tied up in an asset that is not easy to liquidate. If you want money out of stocks, you sell em the next day.
Uh, do you know how much it fucking sucks to move or have to look for a new place? You don't, you live in your parent's basement. And comparing REAL property of REAL value with a piece of paper whose value fluctuates with the marassures you that while you can "get money out of them" quicker you aren't guaranteed to have made any money by doing so.
people buy these "starter houses" thinking they will live in them for a few years and then sell for profit. it dont work like that unless you buy a house on the cheap in a bad economy and sell when shit goes back up. the first 10 years on a loan youre not paying shit towards the principle so your basically paying rent for all intents. i looked at my buddies mortgage statement he got this year. he paid 8900 in interest, 4700 in property tax and only $890 came off the principle.so he bought the house for 164K and after a year of $1300/mo mortgage payments he still owes 163K.
It only works like that if you know what you are doing, and whatever meme this "starter house" shit is it originated in a real estate or advertising office. I know guys buying houses for $70K, dropping $15K and a month's work on them, and flipping them for $130K+ within 6 months - or they were before the economy dipped. Now they are trying to snag cheap repos and distress sales, sit on them until the market heals itself.
They aren't making any more land, the population will continue to skyrocket until a little after 2040, and so prices will continue to go up. It makes sense to invest in real estate, even if it's only your own house. Just because people are going out and paying too much because they don't know what they are doing in no way invalidates the premise.
Also, haven't you heard of making a minimum of one extra payment per year and directing that towards the principle? The idea's there for a reason, and bitching about how mortgages distribute money between interest and principle is kinda dumb when they teach us dumb Southern hicks how to calculate it in middle school. Just because some people are fucking dumb doesn't mean the basic idea isn't sound. :mexi:
i know the deal with the extra payment. it doesnt take a genius to figure out that the more you take off the principle in the begining oor any point in a loan, the less you actually end up spending on the house.
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You were denied the mortage because your income to debt ratio is too high. They used to let you get away with up to 50%, but now if your more than 31% you have no chance regardless of credit. They deemed you too high a risk, and for good reason. You have no safety net. What happens if you break your leg? Medical bills + reg bills = you no pay your house payment. You see where im going with this? Hell, you can file for chapter 13 bankruptcy if you have less than $500 left over after paying all your bills every month. I'd say most of the ppl on this site qualify for it.
Good luck quiting smoking. My grandfather smoked for 50 YEARS, was told he has 2 kinds of cancer and emphisima (spelling?) and quit cold turkey, hasnt picked em up in 5 years. Its all about will power.
Mine was denied solely because of my credit score. I'm thinking if they told him to boost his credit, it's the same reason for him.
Applied for a $150k mortgage, which is about 30k more than I planned on spending (friend picked up 3br/2ba/brick home for $70k), they called and said my debt/income ratio was good, my income was good, but my score was what was preventing me. He stated I needed a score of 620 although the other things were well, and at the time I had about a 590.
I don't have much debt, I just have a ton of small debts which fucks my score up really well. Actually, other than my Orchard Bank secured CC, I had no revolving debt at all, which was why my income/debt ratio was so pimp. It was all the ridiculous little collections on the report that fucked my score.
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Renting allows a certain amount of freedom both fiscally and from responsibility. After your lease is up, you can move anywhere you want. You also don't have your savings/retirement/future tied up in an asset that is not easy to liquidate. If you want money out of stocks, you sell em the next day.
Uh, do you know how much it fucking sucks to move or have to look for a new place? You don't, you live in your parent's basement. And comparing REAL property of REAL value with a piece of paper whose value fluctuates with the marassures you that while you can "get money out of them" quicker you aren't guaranteed to have made any money by doing so.
people buy these "starter houses" thinking they will live in them for a few years and then sell for profit. it dont work like that unless you buy a house on the cheap in a bad economy and sell when shit goes back up. the first 10 years on a loan youre not paying shit towards the principle so your basically paying rent for all intents. i looked at my buddies mortgage statement he got this year. he paid 8900 in interest, 4700 in property tax and only $890 came off the principle.so he bought the house for 164K and after a year of $1300/mo mortgage payments he still owes 163K.
It only works like that if you know what you are doing, and whatever meme this "starter house" shit is it originated in a real estate or advertising office. I know guys buying houses for $70K, dropping $15K and a month's work on them, and flipping them for $130K+ within 6 months - or they were before the economy dipped. Now they are trying to snag cheap repos and distress sales, sit on them until the market heals itself.
They aren't making any more land, the population will continue to skyrocket until a little after 2040, and so prices will continue to go up. It makes sense to invest in real estate, even if it's only your own house. Just because people are going out and paying too much because they don't know what they are doing in no way invalidates the premise.
Also, haven't you heard of making a minimum of one extra payment per year and directing that towards the principle? The idea's there for a reason, and bitching about how mortgages distribute money between interest and principle is kinda dumb when they teach us dumb Southern hicks how to calculate it in middle school. Just because some people are fucking dumb doesn't mean the basic idea isn't sound. :mexi:
I'm going to have to agree with JD. Historically if you do things the right way real estate/property will make you money. I use to watch a show flip this house or some crap like that late at night when nothing else was on.
It had this guy, Armundo?, from Texas who started doing it broke. Now he's rich and in a balla house. Said he started out in a small repo house. Fixed, lived there for 6 months to 2 years and sold for profit. You take the profit in that house and use it to purchase a better house that needs repair. You rinse and repeat till eventually you have the house you want with only your initial small investment in the small crappy house.
Now as far as land where we use to live we could have bought the two acres of land for $15k. About 13 years later when we moved the land in the area right down the street was selling for $30k for a half acre.
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You just explained buying houses as short term investments, not buying houses to live in.
Why you're immersed in a rent vs purchase argument I'll never understand, as you've done neither.
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You just explained buying houses as short term investments, not buying houses to live in.
Why you're immersed in a rent vs purchase argument I'll never understand, as you've done neither.
I rented while I was at school. And before you jump to the next conclusion, I tied my rent to my student loans by saying I was going to live on campus and lived off campus. I then paid back my student loans, thus paying for my rent/expenses. As for buying, I don't know many people in my area that can afford to buy anything at age 24. A 1 bedroom/studio here is on average, $1000+ a month. $1000/month place in NJ is a dump unless you decide to move west(PA), northwest(PA/NY), or south(Piney). If I moved out of my immediate area, I have enough savings to get a $150-200k mortgage, with an assumed average salary in the area.
I'm just offering another side to a typically one sided argument. Over the last 60+years people have been programmed to think you should buy a house/property, when in reality it may not be the best choice.
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You just explained buying houses as short term investments, not buying houses to live in.
Why you're immersed in a rent vs purchase argument I'll never understand, as you've done neither.
I have never liked renting personally. To me it's like pissing your money away. In the end you have nothing to show for it. It amazes me to see people on TV paying $2k+ a month for a small apartment.
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It had this guy, Armundo?, from Texas who started doing it broke. Now he's rich and in a balla house. Said he started out in a small repo house. Fixed, lived there for 6 months to 2 years and sold for profit. You take the profit in that house and use it to purchase a better house that needs repair. You rinse and repeat till eventually you have the house you want with only your initial small investment in the small crappy house.
LOL..ive watched that show a few times. The way he makes his money is by spending as little of it as possible on the shittiest house he can find usually. Most times it looks like he does the bare minimum to make it look a bit better on the surface. I think at one point his brother/business partner left because he was cutting corners on one house.
I feel bad for the people who buy some of them, and I bet if anyone saw the episodes before they went to look at the house...they wouldn't bother. I'm sure they release the episodes waaay later for this reason. I also think most of these "flip it" shows were filmed a few years ago, a lot of them now end with "after XX months, the house is still unsold"
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You cant afford a house.Get the bills down,quit smoking and start saving money. A year or two is enough time to get your credit score in good shape and get in the best financial shape possible.Get the GF a part time job for a little supplemental income. Oh and in Canada we use the exact same credit system both Transunion and Equifax along with the FICO score.
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The truly FREE credit report site
https://www.annualcreditreport.com/cra/index.jsp (https://www.annualcreditreport.com/cra/index.jsp)
You are allowed to hit each of the three agency's once a year.
Nice. I don't really care about my score... I just wanted to make sure someone wasn't opening accounts in my name :P
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I don't think you should be super bummed about not getting a home loan. Houses aren't fantastic investments that people make them out to be unless you think short term 2-5 years. Past that point, interest, taxes, ect ect ect really make it sometimes more expensive than renting and once you go and sell the house you aren't in any better fiscal circumstance. There are circumstances and arguments both ways suggesting buying a home is better or renting is better. So don't get too bummed.
The best thing to do is rent a place less than you'd pay on just the mortgage. Take the assumed difference, and save it away into a savings account or mutual fund. Something liquid. Then just live life as a fiscally conservative person for the next 2-5 years. At the end of that time, you should have money in the bank and a good 2-5 years of sound credit history. They can't hold what you did as an 18 year old against you forever. You need to show a history of good spending. If you can manage 5+ years of it, you will be okay.
this is just plain retarded.
don't listen to this.
property is only a bad invested if something like what happened just recently happens again. prices always go up... you can make money on equity. renting is throwing money into someone else's pocket.
as for putting money into a saving account and making 5 cents a year while inflation kills the value of a dollar... well you get it.
gold, silver, or property if you want a solid investment.
if your property isn't worth shit, but you own it. you still own it.
if you paper fiat money isn't worth shit, you own a bunch of toilet paper.
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Renting allows a certain amount of freedom both fiscally and from responsibility. After your lease is up, you can move anywhere you want. You also don't have your savings/retirement/future tied up in an asset that is not easy to liquidate. If you want money out of stocks, you sell em the next day.
Uh, do you know how much it fucking sucks to move or have to look for a new place? You don't, you live in your parent's basement. And comparing REAL property of REAL value with a piece of paper whose value fluctuates with the marassures you that while you can "get money out of them" quicker you aren't guaranteed to have made any money by doing so.
people buy these "starter houses" thinking they will live in them for a few years and then sell for profit. it dont work like that unless you buy a house on the cheap in a bad economy and sell when shit goes back up. the first 10 years on a loan youre not paying shit towards the principle so your basically paying rent for all intents. i looked at my buddies mortgage statement he got this year. he paid 8900 in interest, 4700 in property tax and only $890 came off the principle.so he bought the house for 164K and after a year of $1300/mo mortgage payments he still owes 163K.
all that shit is tax deductible. it makes a big difference.
plus if he would pay just 50 bucks more a month it will make a big difference (now)
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I don't think you should be super bummed about not getting a home loan. Houses aren't fantastic investments that people make them out to be unless you think short term 2-5 years. Past that point, interest, taxes, ect ect ect really make it sometimes more expensive than renting and once you go and sell the house you aren't in any better fiscal circumstance. There are circumstances and arguments both ways suggesting buying a home is better or renting is better. So don't get too bummed.
The best thing to do is rent a place less than you'd pay on just the mortgage. Take the assumed difference, and save it away into a savings account or mutual fund. Something liquid. Then just live life as a fiscally conservative person for the next 2-5 years. At the end of that time, you should have money in the bank and a good 2-5 years of sound credit history. They can't hold what you did as an 18 year old against you forever. You need to show a history of good spending. If you can manage 5+ years of it, you will be okay.
this is just plain retarded.
don't listen to this.
property is only a bad invested if something like what happened just recently happens again. prices always go up... you can make money on equity. renting is throwing money into someone else's pocket.
as for putting money into a saving account and making 5 cents a year while inflation kills the value of a dollar... well you get it.
gold, silver, or property if you want a solid investment.
if your property isn't worth shit, but you own it. you still own it.
if you paper fiat money isn't worth shit, you own a bunch of toilet paper.
If you say so. I don't think its worth my time to convince anyone of anything. If you think buying is a good investment, buy. If you don't, rent. My whole point initially was that renting can be a better fiscal option in a lot of circumstances. Some homes are great investments, but if you really crunch numbers, you will find that more than you think are not much better than basic savings accounts or CDs. Savings accounts or CDs are even more fiscally conservative and safer investments.
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not when the dollar is worthless and continues to slide into worthlessness
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ZING!
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Savings accounts or CDs are even more fiscally conservative and safer investments.
I think the average person could pick up more change off the ground in a year than they would get in interest from a savings account. Buy a house now and get the tax credit! lol the one they have now you dont necessarily have to repay, I have to repay mine but a zero interest loan from Johnny's pocket still isnt bad :noel:
I regret buying what i bought when i bought it, but i think i'll make out alright in the end. I certainly like being able to say i own (part of) something.
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Its funny you say Specifically 2-5 years. Most anyone in real estate will tell you that the first 5 years are the hardest to get any return on investment because of how the mortgages are structured. You haven't paid shit into equity yet.
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Savings accounts or CDs are even more fiscally conservative and safer investments.
I think the average person could pick up more change off the ground in a year than they would get in interest from a savings account. Buy a house now and get the tax credit! lol the one they have now you dont necessarily have to repay, I have to repay mine but a zero interest loan from Johnny's pocket still isnt bad :noel:
I regret buying what i bought when i bought it, but i think i'll make out alright in the end. I certainly like being able to say i own (part of) something.
Kind of speaks loudly on how questionable buying a home can be, huh?
If you guys don't believe it, run some theoretical numbers and check it yourself. Assume whatever you use as a down payment on your home gets some meager annual interest of 2%. Now you could figure a 6% if you put the money in a less liquid, but more profitable mutual fund.
not when the dollar is worthless and continues to slide into worthlessness
Your home is based on the dollar, so what's your point? Real estate is based on whatever the local currency is. So your point is...........???
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not when the dollar is worthless and continues to slide into worthlessness
Your home is based on the dollar, so what's your point? Real estate is based on whatever the local currency is. So your point is...........???
His point is the home will be worth increasingly large numbers of dollars (inflation) while the average wage earned hardly grows, a trend you can plot out over the last 20+ years.
Treating the home as a fixed amount of money dumped into some bank account or low yield investment, as opposed to something that grows dramatically in value as both demand for real estate goes up and the value of the dollar goes down is exactly why you don't know what you are talking about.
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I may know jack shit about real estate but i will tell you what i do know, from my parents buying many homes over the years (5 so far)as we moved around for my dads job.
In every house they have bought it was in need of some sort of minor work nothing major like roof, siding, etc.... In all these they would go put in new carpet, paint, redo bath rooms, granite counter tops, etc.... pretty much updating an older but well built house.
And after living there from anywhere from 9 months to 8 years, they always come out even or lose a very small amount of money.(in the case of the 9 month house).
They took a 238k house turned it into a 450k house just buy living in it for 8 years and doing small upgrades.
So based off that how is throwing away money in rent a good idea?
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not when the dollar is worthless and continues to slide into worthlessness
Your home is based on the dollar, so what's your point? Real estate is based on whatever the local currency is. So your point is...........???
His point is the home will be worth increasingly large numbers of dollars (inflation) while the average wage earned hardly grows, a trend you can plot out over the last 20+ years.
Treating the home as a fixed amount of money dumped into some bank account or low yield investment, as opposed to something that grows dramatically in value as both demand for real estate goes up and the value of the dollar goes down is exactly why you don't know what you are talking about.
even if the dollar collapses property will be worth something.
if you have pieces of paper and the dollar is worthless you have pieces of paper
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My .02c
The house you own and live in as your primary residence, is not something I would call an investment as such. I think of it as more of a forced savings plan, that you really only get to trade for other real estate. Every month you pay your mortgage, and you get a little bit of that money put into equity in your house. When you sell your house you get that savings, but typically everyone buys a more expensive house each time, as such all of that savings goes into your next place and it continues on. Hopefully by the time you retire, you have either payed it off, or you have enough equity built up that you can sell the big house you mostly own, for a smaller house, that you will completely own and some cash.
The problem I see with trubo16hatch's analogy of his parents place going from 238K to 450K in 8years is this: One inflation hasn't been taken into account, but lets just leave that off the table for right now as it really doesn't make the biggest difference. The biggest difference is that ALL of the houses in that neighborhood, have all done about the same thing. Meaning if you sell your house for 450K at that point, and you want to live somewhere close to the same area, you are still having to buy back in at 450K for about the same relative standard of living. Netting you really no gain. Which brings me back to my first point of that it is really more of a forced savings then anything. This obviously works against you if you buy a place at 400K and the economy around that area fails, and the house market drops to 200K.
Now I am not saying it isn't wise to own your own place, as a forced savings is still better then not getting anything out of it other then a roof over your head at the end of the day. That and typically when you rent, you are only allowed to do very minor changes to the place, and when you own you are free to do almost what ever you wish. Now those freedoms come at a cost, as house insurance is a fair bit more then tenant insurance, and you are now responsible for the costs of the upkeep of the house, and the property (such as shingles on the roof, or painting the fence, the furnace, the hotwater tank, ect...) At the end of the day what I hope for as a home owner, is that the property goes up enough in value to have covered all these sort of expenses, and I break even (with my gain coming from the equity I have put in).
To me an investment would be a second property, that you are putting in sweat equity, of fixing it up, and flipping it in a relatively short time, and you would see the capital gains from that as real money in your bank account, when the property is sold in short order. Or a second property that is rented, and the basic mortgage and hopefully but not always the associated expenses of the property are covered in that rent check. There buy building equity in a second property. Like the forced savings plan, but someone else is putting in the money each month. This ends up playing out in one of two ways: Either you sell the property and you get the capital gains of that equity, and whatever extra the market gives you. Or you keep renting it till the mortgage is paid off, and then you get a second income each month of the rent check minus property up keep.
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Yeah dvst8r
My point was simply you tend to break even on owning a house, as long as the market doesn't take a shit like you stated. I like what you said about the forced saving plan.
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Home values in western NC increase approx 5% annually. Last year, during the midst of the recession, they increased a measly 4%. How exactly is this not a safe fiscal investment, bigwig?
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Our local real estate stays afloat because of the Naval Shipyard... it employs over 1/3 of city. Good job security and benefits.
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Our local real estate stays afloat because of the Naval Shipyard... it employs over 1/3 of city. Good job security and benefits.
Same here. if it wasnt for Military this place would be a shithole.
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I actually just got approved for a loan. The guy said they were looking for 625 or better on the credit score and less than 45% debt-to-income. I have two charge-off accounts on my credit. I paid one and am leaving the other.
I did have to provide 3yrs tax returns with W2s, 3 months checking stmts, and a month of pay stubs. They really want a good picture of your finances.
As for getting your credit up you really only have a couple options.
The charged off accounts are about equal on the score, so that is not much help. (they may ask you to pay them in order to approve the loan though)
Get all of your balances down to $0, this will get your utilization ratio down
Then just waiting for accounts to get some age on them (no fast way to do this)
It will take a few months for things to change though. The score is only updated monthly, so any affects could take a while to show up.
If you are trying to cash in on the $8k your window is getting smaller. You have to go under contract by April and close by June.
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So based off that how is throwing away money in rent a good idea?
Because once you sign the note to the house you are on the fuckn' wheel, and you don't get to stop running.
With an apartment you can tell the landlord to fuck off. You lose what...your deposit? That is nothing compared to defaulting on a home loan.
I am just buying now because my financial situation has become more secure and I have decided that I want to stay in one area.
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Remember they are not making any more land ;)
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not when the dollar is worthless and continues to slide into worthlessness
Your home is based on the dollar, so what's your point? Real estate is based on whatever the local currency is. So your point is...........???
His point is the home will be worth increasingly large numbers of dollars (inflation) while the average wage earned hardly grows, a trend you can plot out over the last 20+ years.
Treating the home as a fixed amount of money dumped into some bank account or low yield investment, as opposed to something that grows dramatically in value as both demand for real estate goes up and the value of the dollar goes down is exactly why you don't know what you are talking about.
even if the dollar collapses property will be worth something.
if you have pieces of paper and the dollar is worthless you have pieces of paper
Johnny, imagine a world where you don't have to buy toilet paper anymore - change for a 50 provides for a week.
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not when the dollar is worthless and continues to slide into worthlessness
Your home is based on the dollar, so what's your point? Real estate is based on whatever the local currency is. So your point is...........???
His point is the home will be worth increasingly large numbers of dollars (inflation) while the average wage earned hardly grows, a trend you can plot out over the last 20+ years.
Treating the home as a fixed amount of money dumped into some bank account or low yield investment, as opposed to something that grows dramatically in value as both demand for real estate goes up and the value of the dollar goes down is exactly why you don't know what you are talking about.
even if the dollar collapses property will be worth something.
if you have pieces of paper and the dollar is worthless you have pieces of paper
Johnny, imagine a world where you don't have to buy toilet paper anymore - change for a 50 provides for a week.
He has. It's rednecktopia. Corn cobs for everyone.