whats your bottom dollar ?
09-23-2010, 11:24 AM
#51
GuyS...here's what makes sense: 1st, floaters have been the place to be the last 5+yrs obviously, and may still be decent for short while more, BUT current rates are the lowest since our Grandparents OR gREAT-gRANDPARENTS took out their first loan. Corporate America is lining up to borrow even if they have plenty of cash on hand. MSFT borrowed $4.75b from the bond market yesterday, and they have a warchest of at least $20b! 2nd, with 30y rates @ 4.25% and home prices on the rocks its never been cheaper to buy property! That said bend over when u go to the bank, cause they're not making it easy any more. 3rd, with the current laws on mortgages and owner optionality, it pays huge to borrow and keep a mortgage to protect against further downside! Why sink all ur capital into an illiquid asset that may trade sideways for a few yrs (or more), when u can use all the bank's cash, AND get interest deductability to boot? If you paid off your house and it was $1mm, if its only worth $750k now and you hit the skids you're fucked -especially in places with no bid like FLA & NEV. At least if the bank owned 75% of the value u paid and u went belly up, then they have all the risk, and the worst you can expect is renegotiation or even tossing them the keys - YOU HAVE ALL THE OPRTIONS. Take that extra payment ur making, put it into an IRA/401K or even a trading account. You have to believe that you can clear a minimum of 4% over the 30y life of the mortgage. Also, u can bank the cash, keep the loan, and lend the cash to your kids to buy their homes in 20yrs using your rate! Trust me, they will need your help. There's a reason the wealthiest people in the nation carry a mortgage. Capital is historically cheap to borrow, and if you invest carefully, you can easily earn both a better return on the house you buy AND the cash you kept to invest because you used the bank's cash for the house.
Last edited by dhpro; 09-23-2010 at 11:41 AM.
09-24-2010, 10:49 PM
#56
Pretty much...lol..Texas is the only other con. state I would consider...Me and my wife bought our first house (built in 56' 2000 sq')in 2005 for $485k our mortgage was $3800....We (she)short saled the house for $300k in 2008...In 2009 we (I) bought a short sale Condo(built 82' 1200 sq') in Downtown for $285k...I know I would make $15 an hour less in Tx, and my Wife would make $20+ less....Soo I would have to weigh it out...Hot weather, affordable house, no state tax,Lots of Fast cars/trucks lol, lower wages,Patriotic Conservitive's -or- 75* every day, avg house $400k, TONS of state tax, Tons of Hondas/lifted trucks, Higher wages,Very liberal...
my house (built in '62... 1400 sq.feet) cost me $94k... i could not live in cali...
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