Case (![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png)
case) wrote in ![[community profile]](https://www.dreamwidth.org/img/silk/identity/community.png)
fandomsecrets2014-05-31 04:03 pm
case) wrote in fandomsecrets2014-05-31 04:03 pm
[ SECRET POST #2706 ]
⌈ Secret Post #2706 ⌋
Warning: Some secrets are NOT worksafe and may contain SPOILERS.
01.
__________________________________________________
02.
__________________________________________________
03.
__________________________________________________
04.
__________________________________________________
05.
__________________________________________________
06.
__________________________________________________
07.
__________________________________________________
08.
__________________________________________________
09.
__________________________________________________
10.
__________________________________________________
11.
__________________________________________________
12.
Notes:
Secrets Left to Post: 04 pages, 079 secrets from Secret Submission Post #387.
Secrets Not Posted: [ 0 - broken links ], [ 0 - not!secrets ], [ 0 - not!fandom ], [ 0 - too big ], [ 0 - repeat ].
Current Secret Submissions Post: here.
Suggestions, comments, and concerns should go here.
Re: Completely lost and confused and miserable right now
(Anonymous) 2014-06-01 03:01 am (UTC)(link)First of all DO NOT MAKE ANY SUDDEN MOVES. Sounds like your mother is trying to pressure you, and thinks she has time on her side. This is a very bad thing. Your mother is from an older generation with a different mentality, that does not apply to the world the way it is today.
Secondly. YOUR MOTHER IS WRONG. She is a brainwashed sheep from the generation of people who think self-worth is tied up solely in how much stuff you "own" (even though YOU won't own a house, the bank will).
Real estate is a VERY BAD investment, unless you are able to afford an apartment building, and rent it out. There will ALWAYS be extra/hidden costs that the "Mortgage payment is soooo much cheaper than rent!" PR hacks/real estate agents WILL NOT tell you about. (Oh, yes, there is also the 3-5% real estate agent's commission, can't forget about that). DO ALL THE RESEARCH. Ask to see copies of six months' utilities bills (so you have a general idea of what summer vs. winter heating/power/water/gas costs will be.
Thirdly. Mortgages suck, and if you get trapped in one, the only way out is to sell your house. The problem with this? You will then be homeless. Mortgages were good, forty years ago, when people had a hope in hell of paying them off in their lifetimes, but these days, most houses LOSE equity, and end up being sold to cover the funeral costs of the former occupant (if they will even do that much).
IF you can find a house in your area that is in foreclosure/being sold by the bank, you may be able to purchase it with a Home Equity Line of Credit. Much better than a mortgage, because you can pay off huge chunks whenever you can/want, or just pay the interest only, which is usually very low (though this last step is highly unadvisable, because then you're basically in the same catch-22 you would be with a mortgage).
You've already acknowledged that you wouldn't be able to pick up the phone and have stuff fixed for free. In a home-owning situation (especially if you are a single homeowner), you definitely won't be able to have anything fixed for a small amount; factor in at least $500-$1500 a year for emergencies. If you can save up that much, great! If you crunch the numbers, and cannot at all afford anything like that after you work out a budget with all of your mortgage, property tax, utility bills, transportation costs, and grocery costs, then look for something cheaper, or don't buy at all.
The worst feeling in the world is being house-poor, anon. Take it from someone who was there, and bailed after eighteen months in the nightmarish Money Pit. (Worse than the movie it was.) If you can come to terms with the fact that the bulk of your monthly income (at least 50%, this is before groceries, gas for the car, or any kind of disposable income) will be going solely to keep a roof over your head (when it's not leaking), then hey, more power to you.
The other thing is, you are absolutely tied to a house, and if you try and "flip it" (i.e., sell it within a year) without doing major work to it, or try to get out of a bad sitch after you've gotten into one by selling it (this was what I did), you will lose money. (I lost $30K, between the $20K I sunk into the place in the first year I was trapped there, and the $10K down payment, neither of which I got back, after the sale of the house 18 months after it was purchased. I couldn't handle living IN the house, either, so it was the lesser of two evils to take a loss on it.) So be prepared, if you're unhappy, to be stuck and unhappy, unless you don't mind taking a loss and having a lesson learned. But if you want to pick up stakes and move six months after you buy? Not going to happen, at least not without losing money.
Either buy cheap and sell large (that's what I've done, I own my place outright, and don't owe anyone for it, and will stand to make a literal 1000% profit on it when I sell), or keep renting and be happy. I still have debts, although not as much as I did from the first place I owned, and if anything happened tomorrow, I could sell off and be very comfortable for several years. But my situation is pretty much unique, and when I sell my current house, I likely will rent again, for the convenience, the frugality, and just the general freedom of not being tied down to something I don't even own.
Think it over carefully and don't make any sudden moves, no matter how much pressure family members put on you. Family pressure was how I ended up in my first mistake of a mortgage, and I swore it would never happen again. Do what's right for YOU, and don't listen to anyone else. It's YOUR future financial security and psychological well-being you have to think about, and owning a home is conducive to neither, in my experience.
Re: Completely lost and confused and miserable right now
(Anonymous) 2014-06-01 03:24 am (UTC)(link)Other things "they" don't want you to know about mortgages:
Sub-prime mortgages are what tanked the global economy. Why? Because when interest rates rose, people couldn't afford the McMansions they were living in. So all the ads about LOW LOW LOW INTEREST RATES have a hidden catch; these are often only locked in for one, three, or five, years, and then you're on the hook with re-budgeting for amounts 200% or more higher than you started out paying.
You CANNOT pay large chunks off on a mortgage. The banks WANT to keep you debt, and if you try to pay a large sum down, you will have to pay a PENALTY to do so. Yes, that's right, you're penalized, for wanting to pay down the debt/lower your payments, but if you can't make the payments on said debt, you'll lose the house. Bank makes a profit either way, so they DGAF. Literally.
Banks/brokers will tell you that mortgages are not to exceed 33% of your income, so hey, you can afford that, right?? Cheaper than rent, right?? What they don't tell you is they factor this based on your GROSS income, not your net, so pre-taxes. So this figure is basically bogus (and any broker/banker who tells you otherwise is blowing smoke in your eyes and trying to close the deal). As I pointed out, this figure also does not take into account the remainder of your income going on property taxes, utility bills, and the little bit you will have left over to buy groceries and gas. (And even that won't be much.)
Secondly. You have a choice of Bad, Very Bad, or Ninth Circle of Hell Bad, when it comes to choosing mortgage options. You can get a "locked-in" mortgage for one, three, or five years, but as I noted, after that expires, you're totally at the mercy of the current (and fluctuating) interest rates, unless you want to re-mortgage. Which you will have to do, as you will not have paid anything off on the principal of your debt in so short of a time. (Do not ever, ever, ever, let a banker try to sell you on "a second mortgage" as a debt consolidation scheme. You WILL lose the house, and not only that, you will deserve to, if you're stupid enough to compound both your debts and your interest rates, in that situation.)
You could choose a variable-rate, but then you're at the mercy of interest rates ALL THE TIME. No problem, you say? Interest rates are low low low right now you say? They won't always be. And when they skyrocket, you're going to be stuck in a loan, the payments of which will have suddenly tripled, quadrupled. or quintupled.
The third option is a fixed rate for so many years, and a variable rate for the remainder of the time. Which combines the worst of both mortgage types I have outlined above.
Mortgages were fine, and provided an entry-level to accessible home ownership in the 1950s post-WWII era. Now, they're just a money-grab by the banks, and leave the lendees in more debt than they will ever know what to do with, and likely will remain that way for the rest of their lives.
TL;DR: Mortgages are bad things, OP.
Re: Completely lost and confused and miserable right now
(Anonymous) 2014-06-01 03:40 am (UTC)(link)The other thing I forgot to add is the amortization scam. Basically the reason your "low" mortgage payments (they aren't low, not by any stretch of the imagination) don't see you in the hole for ten grand a month, are because they figure out how you will pay the loan back over twenty-five, thirty-five, or forty-five years, factoring your income and how much you can pay on interest and principal (and, like I said, you're not allowed to pay big chunks off on the principal, because they want to keep you in debt).
But once you sign the papers, you are now on the hook, for the loan, for the length of time that you decided. And the longest length of time is usually the only one you will be able to afford (this is amortization in a nutshell). Also don't forget that this interest will be compounding over all these years, so staying in for the length of the loan may still sometimes see you in debt, and still owing the bank at the end of it, due to interest rate fluctuations over the decades, even if you do manage to luck out and lock in with low rates consistently (this is almost impossible) over two or three or four decades.
So, either way, regardless of the fixed-rate or variable-rate options, unless you sell the house and/or remortgage, you will be paying money to the bank for a house you won't even own outright, for DECADES. And even then, you might owe the bank money still.
Re: Completely lost and confused and miserable right now
(Anonymous) 2014-06-01 03:00 pm (UTC)(link)I'm trying to keep in mind that things were much different in her generation but it's hard, especially when my brother's bought into the same mindset. Although I did have the same thought you mentioned, back when he first bought his house and was giving me all sorts of shit about living in an apartment, that he doesn't own it, the bank does. Thanks for reminding me of that, because it does help me look at it in a different way.
I did some research yesterday and found a bunch of foreclosures, including one that's pretty much my dream home and is well within my price range, but my mom said foreclosures involve a lot of extra paperwork and it would take at least 6 months for everything to go through and at the end of that time they could still change their mind about letting me buy it and it isn't really worth it. It's starting to sound like she has no clue what she's talking about though so I guess I need to just find a banker to talk with maybe? Or a realtor? I'm not sure what my first step should be, honestly.
Either buy cheap and sell large (that's what I've done, I own my place outright, and don't owe anyone for it, and will stand to make a literal 1000% profit on it when I sell), or keep renting and be happy. I still have debts, although not as much as I did from the first place I owned, and if anything happened tomorrow, I could sell off and be very comfortable for several years. But my situation is pretty much unique, and when I sell my current house, I likely will rent again, for the convenience, the frugality, and just the general freedom of not being tied down to something I don't even own.
If you don't mind me asking, how did you come to be in your situation? Did you buy a foreclosure?
Thanks for all the mortgage info! I didn't realize it worked that way with the interest rates. My mom said hers changed a little each year (so I guess hers is a variable rate one from what you've said?) but that it was never very much and it was no big deal at all. She's had her house for almost 40 years I think and I'm not sure about a second mortgage but I know she's had it refinanced a bunch of times and still owes a bunch on it. And my brother had to get a second mortgage to buy his in the first place (at least I think that's what my mom called it) because he didn't have enough for a down payment. He apparently way overpaid for his (it's a lot smaller and nowhere near as nice as my mom's and is in kind of a dangerous part of town, and he paid a lot more than hers is worth) and a couple months after moving in he had to get a roommate because he couldn't afford the monthly payments. Plus he's had a bunch of problems he's had to pay to fix because apparently the inspector wasn't very good and missed a bunch of issues with the house. So when that was all going on I thought "thank god I live in an apartment" but since then they've managed to get me all depressed again about not owning a house.
And my mom keeps saying to just buy a house and if I end up not liking it and want to move I can just sell it and go somewhere else because "buying a house is never a bad investment" and she's "never heard of someone who didn't make all their money back when they sold their house" but it sounds like that's not the case from what you're saying. Oh, and also she's mentioned several times about paying more each month to try to pay her house off quicker but you said you can't do that?
I don't know, all this is really making me want to just find another apartment and be done with it. To me it's always made perfect sense, I pay each month for somewhere to live, and the convenience of not having to fix (or pay to fix) anything myself, and not being stressed about having to worry how to pay a mortgage if I lose my job or something (depending on where I was in a lease I might owe a few thousand dollars or something but that's nothing compared to like a couple hundred thousand).
Anyway, thank you SO much for posting all this, it's helped me a lot and given me a lot to think about. :)