If you're paying PMI...

They said $500 for the appraisal. So I will make that back in ~3 months.
 
SkyHog said:
To your edit - I have determined that I will forever have a car payment. For that reason, I always pick 72 months for the term. My next car might be a lease instead, for that exact same reason.
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That's nuts-- buy something reliable off -lease and keep it 7 or 8 years. Leasing is a moneymaker for the auto companies.

You have gap insurance? You're totally under water and if you wreck you'll be paying the bank to take the heap.
 
Henning said:
What's that, $750? If there's no refi costs involved, seems pretty straight forward to answer.
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That seems high. I see that Brian got a quote for $500.

You can also check with your lender, if it's obvious the home values have gone up enough they might not even require it. I remember that my mortgage holder did, but my neighbor said she didn't need an appraisal. It could be the difference is that she was already >20% in based on payments and I was relying on appreciation.
 
EdFred said:
$175k isn't a starter house for a $70k income couple. They are over buying.
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That's a starter house in the DC area. Maybe. More like 250 and up. They are building townhouses near me starting at 1.2 million.
 
wsuffa said:
That's a starter house in the DC area. Maybe. More like 250 and up. They are building townhouses near me starting at 1.2 million.
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In DC I hope a couple is making more than $70k or that's like poverty level.
 
EdFred said:
In DC I hope a couple is making more than $70k or that's like poverty level.
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You would be surprised. There are plenty of service sector jobs where the employees can't live within an hour of town.

There is a saying among real estate agents : "drive till you qualify"

Some folks do 100 mile commutes.
 
wsuffa said:
You would be surprised. There are plenty of service sector jobs where the employees can't live within an hour of town.

There is a saying among real estate agents : "drive till you qualify"

Some folks do 100 mile commutes.
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At that point, you may as well find a completely different - and cheaper - metro area. Especially if it's a service job. Make that $35k worth more by going somewhere else.
 
paflyer said:
That's nuts-- buy something reliable off -lease and keep it 7 or 8 years. Leasing is a moneymaker for the auto companies.

You have gap insurance? You're totally under water and if you wreck you'll be paying the bank to take the heap.
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I'm not underwater. I'm not dumb enough to buy new.

And no, no gap.
 
EdFred said:
At that point, you may as well find a completely different - and cheaper - metro area. Especially if it's a service job. Make that $35k worth more by going somewhere else.
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Yep, but not everyone has the choice for any number of reasons. There are law firms in DC paying admins that have been working for 20 years (with a college degree) in the low 50's. And we won't even talk about what Hill staffers make - they value being in the seat of power more than the salary.

Heck, what do starting pilots make, anyway?
 
EdFred said:
I guess other people's definition of starter house, and my definition are vastly different.
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Well,yes! I'm still living in what most younger people would not even consider a starter house, but I have two airplanes a yacht, living debt free. Oh! I have money invested and a suitcase full of $100 bills(hyperbole). I'm nearing retirement with no worries and looking for a lake house. There will be no mortgage. It has been difficult but worth the hard work , saving, and living well below our means for years. I can have any any amount of gasoline on my property I want. :stirpot:
 
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EdFred said:
How does a mortgage payer not know this?

When I was getting ready to buy my first place it was strongly emphasized by my parents to not pay escrow for taxes, and to avoid PMI if at all possible. I was able to do both. I pass along that info to anyone I know that's getting ready for the first time buy. Of course, in today's financial thought process, it's tough for people to put 20% down on anything anymore.

Also - when you signed your mortgage papers did you read the limitations on what you can and cant do with your property? On one of mine they had a statement that I could not store more than 5 gallons of gasoline on the entire property. There were some other interesting provisions they tried to slip in there as well.
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Asked and answered.
 
HOOKERS!




Wait, what are we talking about?
 
EdFred said:
At that point, you may as well find a completely different - and cheaper - metro area. Especially if it's a service job. Make that $35k worth more by going somewhere else.
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wsuffa said:
Yep, but not everyone has the choice for any number of reasons. There are law firms in DC paying admins that have been working for 20 years (with a college degree) in the low 50's. And we won't even talk about what Hill staffers make - they value being in the seat of power more than the salary.
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As noted, some jobs can't be done elsewhere. Here's the pay scale (ending in March 2015) for Bernie Sanders staff on Capitol Hill:

https://www.legistorm.com/member/460/Sen_Bernie_Sanders/198.html

Only 6 out of the 53 listed make more than $40K per year.
 
EdFred said:
I think that only serves as further evidence how stupid everyone in government is. :D
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The experience gained is of high value. Once they learn the workings of the Hill, it's off to a private lobby firm.
 
vintage cessna said:
The experience gained is of high value. Once they learn the workings of the Hill, it's off to a private lobby firm.
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My niece was a page and later an intern, unpaid jobs in DC. But it helped get her into Dartmouth. She graduated last year and with just a bachelors landed a job paying more than I'll ever make. After this next year they'll keep her on salary to attend law school full time. It really is a different world for some people.
 
Gerhardt said:
My niece was a page and later an intern, unpaid jobs in DC. But it helped get her into Dartmouth. She graduated last year and with just a bachelors landed a job paying more than I'll ever make. After this next year they'll keep her on salary to attend law school full time. It really is a different world for some people.
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Was she trying to buy a house in DC while she was a page/intern?
 
EdFred said:
No.



I don't want to deal with dead beat renters. I looked into it, talked a few people that have done it, and all but one are trying to get out of it. I'm well past 20%. It's amazing how much money you can bank when you don't date (though this is more involuntary than voluntary),don't have kids, and have had your mortgage paid off for over 10 years.
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I decided to diversify into real estate and studied residential vs commercial. Commercial won hands down, a lot less hassle with people , maintenance and consumer protection laws.
 
vintage cessna said:
I decided to diversify into real estate and studied residential vs commercial. Commercial won hands down, a lot less hassle with people , maintenance and consumer protection laws.
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But the sales cycles are longer and less frequent.
 
SkyHog said:
I'm not underwater. I'm not dumb enough to buy new.

And no, no gap.
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"I always pick 72 months for the term"

So you're buying a USED car with a 6 year loan??
 
paflyer said:
"I always pick 72 months for the term"

So you're buying a USED car with a 6 year loan??
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Yep. And my car payments are very, very low.

Figured since I am always going to have a car payment, I might as well keep them super low.
 
SkyHog said:
Yep. And my car payments are very, very low.

Figured since I am always going to have a car payment, I might as well keep them super low.
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As long as you don't wind up with a lemon, or can cash out at any time, that's fine. A 6 year note you are upside down in for 3-4 years. For a person who can't afford to eat the old car and get a new, it's not a good situation to be in because now you need B-C paper to get into a car and pay off the old one along with the new at 17% to get to work. My rule is no payment schedule longer than the warranty.
 
Henning said:
As long as you don't wind up with a lemon, or can cash out at any time, that's fine. A 6 year note you are upside down in for 3-4 years. For a person who can't afford to eat the old car and get a new, it's not a good situation to be in because now you need B-C paper to get into a car and pay off the old one along with the new at 17% to get to work. My rule is no payment schedule longer than the warranty.
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I trade in my vehicles every 3 years or so.

Works great.
 
Alternately, I spend a fair amount of time and money at O'Reillys and have no car payments for a long, long time. Did pay cash for the kids Priuii when we bought them. Once we got the price where we wanted it, the sales guy was rather put out we weren't financing. I felt - bad. No, really I didn't.
 
SkyHog said:
Yep. And my car payments are very, very low.

Figured since I am always going to have a car payment, I might as well keep them super low.
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My car payments are very low too. They're ZERO and have been since 1991. It's not difficult to save money for a new car before you need one. All you have to do is get that first car, and after that it's the same thing with little or no thought.

If you can make a car payment, you can save the car payment in your own account and then write a check for the car.

Regarding your three year trade, wouldn't it be better to find a quality mechanic? I buy a 4 to 5 year old Mercedes for both me and my wife and drive them until they have 200k miles, give them to Habitat for Humanity and start the process over.

My mechanic is a mobile Mercedes mechanic and takes care of almost all maintenance on them, in my driveway at 60% of what the dealership would charge me.

If you put as much thought into how "not" to make a car payment as you did in how to make car payments work for you, it might open your eyes to a better option.
 
retailguy said:
My car payments are very low too. They're ZERO and have been since 1991. It's not difficult to save money for a new car before you need one. All you have to do is get that first car, and after that it's the same thing with little or no thought.

If you can make a car payment, you can save the car payment in your own account and then write a check for the car.

Regarding your three year trade, wouldn't it be better to find a quality mechanic? I buy a 4 to 5 year old Mercedes for both me and my wife and drive them until they have 200k miles, give them to Habitat for Humanity and start the process over.

My mechanic is a mobile Mercedes mechanic and takes care of almost all maintenance on them, in my driveway at 60% of what the dealership would charge me.

If you put as much thought into how "not" to make a car payment as you did in how to make car payments work for you, it might open your eyes to a better option.
Click to expand...

I do similar, but my primary vehicle I now buy new (cash - well, a check) and keep it for a few years - current truck is 8+ years old. After I get tired of it, or it finally dies, I will repeat the process.
 
EdFred said:
I do similar, but my primary vehicle I now buy new (cash - well, a check) and keep it for a few years - current truck is 8+ years old. After I get tired of it, or it finally dies, I will repeat the process.
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but you've now reached a point where you can absorb the depreciation hit, if you so choose. I maintain that people who make car payments shouldn't do that, unless, well, they like making their bank one of the biggest companies in the world.

While it's harder to do with a house, it can be done as you've proven. I've rolled my eyes a few times at the responses of how "hard it is" to save 20% down for a house.

It's so much "easier" to make banks wealthy. It's so much easier not to have a bit of discipline and defer rewarding yourself with something you earned.

My rant is over. The banks have succeeded in convincing the majority of modern America that "there is no other way".... It's very sad, really.
 
retailguy said:
but you've now reached a point where you can absorb the depreciation hit, if you so choose. I maintain that people who make car payments shouldn't do that, unless, well, they like making their bank one of the biggest companies in the world.

While it's harder to do with a house, it can be done as you've proven. I've rolled my eyes a few times at the responses of how "hard it is" to save 20% down for a house.

It's so much "easier" to make banks wealthy. It's so much easier not to have a bit of discipline and defer rewarding yourself with something you earned.

My rant is over. The banks have succeeded in convincing the majority of modern America that "there is no other way".... It's very sad, really.
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Well it *is* hard to save when you "have to have it now." There is no such thing as consumer patience for 99% of the country. The vast majority can't wait for anything. If credit cards never existed, I don't think this would be as much of an issue as it currently is.
 
Wait, what do you think would happen to the economy if people saved for what they wanted? Why do you think consumer interest rates are as low as ever? That's what the Ponzi scheme management had to throw in in 2008 to keep the scam going. Problem is, they can't raise the interest rates again, as everything is already full jack, and any slow down in spending will collapse the economy again, with nothing to throw in except the cash sitting with the Federal Reserve created during Quantitative Easing that we are paying for it to sit there. The banks have lost the ability to control a collapse, Gold is already high, not much hedge there.
 
EdFred said:
Well it *is* hard to save when you "have to have it now." There is no such thing as consumer patience for 99% of the country. The vast majority can't wait for anything. If credit cards never existed, I don't think this would be as much of an issue as it currently is.
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Exactly.

I wanted fly since I was 7. I learned to fly when I was 44. Why? Because I couldn't do the things that I needed to do to take care of my family and fly also.

I waited until I could afford it. It sucked for 30 years watching planes go overhead. Today, on the other side, it's the best thing I ever did.

It is such a blessing, from the planes I can now afford to the places I can go, to the "reward" of waiting for what I really wanted.

Bank of America could have never given me that. YMMV, but I sincerely doubt it.
 
retailguy said:
My car payments are very low too. They're ZERO and have been since 1991. It's not difficult to save money for a new car before you need one. All you have to do is get that first car, and after that it's the same thing with little or no thought.

If you can make a car payment, you can save the car payment in your own account and then write a check for the car.

<snip>

If you put as much thought into how "not" to make a car payment as you did in how to make car payments work for you, it might open your eyes to a better option.
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Around here, the Korean banks offer "installment" savings accounts. Say you know you want $25k for a new car in 4 years, they'll amortize it for you, and you deposit $xxx.xx per month to end up with the $25k. It's the reverse of a car payment and the compounding works for you, not against. :) Never seen anything like that from a US bank, ever.

http://www.firsticbank.com/web/savingcdira/#03

https://www.metrocitybank.com/personal-banking.htm#PISavings
 
guardrail said:
They take your money, pay your insurance bill and your tax bill, on time, generally early (in our county that gives a bonus savings) and do that for the literally dollars a year they earn in interest. I'm ok with that. At some point it's not worth the hassle. I pay 3 sets of insurance, 3 sets of taxes; I'm fine with the $30-40/yr to handle that.
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I'm not... I didn't ask for a money manager. My wife was in corp finance for 20 years. She knows money managing to the penny and we don't need a third party to hold money on our behalf. It's our assets, not theirs.
 
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