Kindof OT, but have you read this fannie/freddie may stuff?

It doesn't work the bank will lease them out the average american can't afford them.It's a good buy for overseas buyer's.That's our govt takeing care of us.Our as our gov. lawmakers call us "those folks" sort of sounds like those turds!!!!!

 

The problem is that for many years now, people have lived above their means. They bought expensive houses, cars, etc. because they "wanted" them.

They gave no thought to if they could AFFORD them.

They went into a buying frenzy and drove prices unrealistically high. They always thought that rates would keep going down and there would always be the "next refi."

Anyone who has studied basic economics knows that there are cycles, and that this couldn't keep on forever.

But everyone spent all the money they made and then some. The concept of saving to buy something when you could afford it or having an emergency fund was unknown.

Now the chickens have come home to roost.

It's not going to be pretty for the next few years, at least. But I hope that people will learn to be more frugal and realistic in their spending and learn to save some. Then, and only then, are they truly ready to be homeowners.

There's really nothing wrong with renting. There are many advantages as well, like you don't have to pay for maintenance or upkeep.

The problem is that everyone seems to think that a house is an investment, but often if you "run the numbers" you'll find that you come out ahead in the long run by renting and investing the difference (what you're not paying for the upkeep, taxes, etc). BUT--you have to INVEST it. That doesn't mean buying a new car or a new TV or the latest whatever. It means keeping the car until the wheels fall off, checking books out of the library instead of buying the, and putting the difference into a sound investment.

 

It's not the government's responsibility to buy you or anyone else a house--or to bail anyone out that has bought beyond their means.

The government needs to get back to what the government is supposed to do by the Consititution--provide for the security of the country and a few other things. The government was never intended to give handouts to everyone.

People need to learn to work, to save, and to buy what they can afford.

 

Hedwick don't forget buying a new car is a bad investment buy used.growing up i always had to save up my dad told me that,he also said a house was a bad investment because of the upkeep and other unseen costs.When you buy for 500,00 and 4 years later it's worth 250,000 you'll have to sell short or walkaway.you can't sell enough of your toy's to stay in it.god bless my 94 saturn coupe which im starting to outweigh and not able to fit in i'll take the doors off and hang on.

 

Well, I bought my first house when I was in my 30s.

I had money in the bank, and the payments were less than rent would have been.

I bought my current house ten years later. I bought a foreclosure, so I had almost 25% equity in it right away. Again, it was about what I would have paid in rent, or a little less.

Now I have a $300K house with a $160K mortgage. I can afford it, I will never be upside down in it. My mortgage payment is about a third of my take-home income--and that INCLUDES the taxes and insurance. It's not a big house. I'm cramped in it, but I can afford it. I'll put up with some inconvenience to be within my means.

I have almost one year's worth of take home pay in the bank.

What DON'T I have? I don't have cable. I don't subscribe to newspapers. I don't have clothes from Macy's. I don't have shoes that cost $100 or more per pair. I don't go out to lunch every day. I don't go on extravagant vacations every year. I don't have a second home, or a vacation home, or an RV. I don't have new clothes every month. I don't have a new car every year or two. I don't get my nails done. I don't have a lot of expensive jewelry, and what I do have was given to me as gifts.

I could keep on for a while. I buy food on sale. I take lunch with me to work. I read library books for at least part of my reading. I drive my cars until the wheels fall off. I shop at discount stores (and they sell a lot of the same brands as the "name" stores--for about half the price). I put over 20% of my salary away (not total income, I do have a few small sources of income that I don't take savings out of, but it's well over 15% of total income).

I've learned to invest small amounts each month, it adds up. And I've learned to not panic and sell off investments when the market goes down. Instead, I buy more while it's "on sale."

 

That may or may not be true, it depends on your driving habits. I do often buy new cars--but lower-end models, not the luxury ones. I do a LOT of driving, and used cars often end up costing me a lot in repairs before I have them very long. So I've learned that if I buy an inexpensive, but reliable, new car and keep it 10-12 years, I'll come out ahead in the end. I know what maintenance was done and what wasn't.

It seems that a lot of cars get traded when they have the engine or transmission developing problems. I'd have to buy a fairly recent used car. I've done it several time, mostly with bad results.

One of my current cars I bought used, but from an extended family member, so I knew it had been taken care of. But the last two used cars I bought before that ended up costing about $3-5K in repairs in the first year. I could have added that to what I paid, and had a new car that was financed at a very low rate, instead of a used car and a bunch of repair bills that depleted my savings or cost me higher interest on a credit card.

But for people that don't put 35-40K miles on a car in a year, I agree that a used car may be a better deal.

 

Thats what i meant i don't need a heated seat or other things.If i want to go somewhere with a lot of miles i just rent for a couple of days.I live 4 miles from work so a used car makes sense for us.