Clawing The Thin Ice

[lonewolf]

http://news.yahoo.com/s/ap/20100427/ap_ ... ial_crisis

This is not meant to be a political thread. As expected, bad things are accelerating in Europe and its only a matter of time before it hits home. As long as the bad news is confined to Europe, it will actually be good for the dollar and the American consumer.

It may be a matter of months or even a few years before it hits home, but unless you hear of the federal budget deficit literally being cut in half or more, you can rest assured it will hit home.

This will cause many problems, but the biggest ones that the average American will experience are a significant rise in interest rates and a significant devaluation of the dollar, resulting in big price inflation. The only thing that won't go up are fixed credit agreements, including fixed mortgages.

If you've been thinking about buying a house, now's the time to do it. If you presently rent a house or apartment, I'd strongly urge you to consider buying a house. I know its presently not the best option for some lifestyles, but you will think differently when your rent doubles or triples. A fixed mortgage payment will stay the same and you can pay it off with cheaper dollars in the future.

One thing about buying a house thru a realtor: They will "calculate" what price of house you can "afford" and recommend that you mortgage to the hilt. This can be a smart move only if your present income level is absolutely guaranteed. Otherwise, this is the kind of thing that got us in the present condition in the 1st place. Unless you are absolutely sure of continued income, figure on about 1/2 to 2/3 of the realtor's amount and you will be better off.

[songsmith]

I have a fixed-rate, half a point above the bargain rates of a few years ago... I'm no financial whiz like LW, but I saw the ARM ripoffs coming a mile away. I went with a local bank, whose agent I actually knew, and he had to look me in the eye when I signed the mortgage. BTW, my house is very humble, and we could have gotten a FAR bigger mortgage at the time, but again... a mile away. Now, I'm sitting pretty in my little property next to the Norfolk tracks, on the edge of a well-to-do neighbor's beautiful manicured meadow. We've been here 5 years and the place is about half paid-for, on a 30 year loan.
I don't think I could play the market like you, Jeff, but by golly, growing up poor has had it's benefits, hasn't it? I think we both have the Superman-like ability so see when someone's eyeballing our wallets. --->JMS

[lonewolf]

but by golly, growing up poor has had it's benefits, hasn't it? I think we both have the Superman-like ability so see when someone's eyeballing our wallets. --->JMS

I think it makes you choose pragmatism over irrational exuberance and conspicuous consumption.

[songsmith]

Um, yeah, words to that effect. --->JMS

[thebattle]

yah buying the house would def be the best bed i bought mine about 3yrs ago 6.5% 399.20 i think is what my payment is. Never understood why people rent. Prob could have refinanced for a lower rate but im satisfied with what im paying

[lonewolf]

Watch the news tonight..

"...don't be surprised when a crack in the ice....appears under your feet..."