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Thread: how much was your home/apartment?

  1. #1
    mermaidnz
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    Default how much was your home/apartment?

    i know theres ALOT of US resident strippers who own their own homes, and im just curious how much you paid for it?

    theres very few dancers in my club who own an apartment or home. im just trying to justify it by thinking, maybe houses in some parts of the states are alot cheaper then what we get around here.

    a typical freestanding house in any of the main cities-melbourne/sydney/perth/brisbane are $400,000...and 400k buys a piece of shit house that needs things done to it, or is in a dodgyish area. a decent house in an ok area is over the half mill here.

    im so torn between buying a house or blowing the money on fuck knows what.travel most likely.

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    Default Re: how much was your home/apartment?

    Quote Originally Posted by mermaidnz View Post
    a decent house in an ok area is over the half mill here.
    It varies all over the place from one part of the country to another, but that sort of range for that sort of home/location is common in many areas of the US too (in US dollars, of course), especially in or near the major cities. It can be higher in some places.

    Imo, buying a house as a residence (not just as an investment) is usually a good investment (depending on the details of course) in purely financial terms (you get to live in it while it appreciates, get a tax break...in the US anyway, have a good chance of recovering the equity you build up vs none of recovering rent payments, etc). However, imo, it *sucks* as a lifestyle and brings with it endless demands on your time, energy, attention, money and so forth. It makes some sense for people raising children and thus tied down in many ways for other reasons, but if I were young and single (ha!), I'd buy experiences (e.g., travel...and you know the main place I'd go too) over property any day. But again, this is not a simple financial consideration; it is also a major lifestyle choice.

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    Default Re: how much was your home/apartment?

    My particular story is sort of weird. I had been living, working and renting in the North Jersey / NYC area, where even a 'starter house' in the Jersey burbs runs $250,000 plus. When I decided to retire from live dancing I faced the question of continuing to live in the same metro area, or to move back to upstate NY where my family originates. I decided to do the latter. While I was in upstate NY visiting my mom and making plans to move back to that area, she pointed out that the house which my grandfather built, and which was sold on the open market after my grandmother died, had just come back on the open market again.

    This house was solidly built in the 50's, sitting on 2 acres of land adjoining a woods, and had been somewhat remodeled by the interim owner, including a 400 sq ft addition onto the 1200 sq ft or so that was already there. Obviously I had some pretty good non-economic motivation to want to 'bring grampa's house back into the family again', so I was prepared to buy it at any sort of realistic asking price. By north Jersey burb standards, this house would have gone for $300k easy.

    But in relatively economically depressed upstate NY I was able to buy the house for $75k with very little negotiation - probably because the seller was 'motivated' (i.e. flirting with bankruptcy) and I actually had a great credit rating plus any amount of down payment money that the mortgage lender chose to require, versus a few other would-be buyers whose shaky mortgage financing kept falling through on the 'motivated' seller (thus pushing him even closer to bankruptcy every month that the house remained unsold) ! I signed on to a 20% down 20 year fixed rate mortgage, and my payments are right around $700 a month (including property & school tax escrow).

    Of course between a new hi-e furnace, new well pump, new hi-e water heater, new septic system, new hi-e windows, roof repairs, jacuzzi tub, fireplace, and some other remodeling of my own, I've definitely plowed another $30k into the house in the last couple of years plus hundreds and hundreds of hours of my own time. Thank God that my dad was a building contractor, so I have access to all of his saws / nailguns / pipe wrenches which my mom kept after he died ... and thanks to his teachings while I was growing up I also have a fair idea of how to use them ! I also have to say thank you to some 'gentlemen friends' who for some reason were extremely willing to volunteer their time to help with my renovation projects ... particularly with the fireplace and the Jacuzzi LOL !!! I have made it a point to pay for all of these repairs and improvements out of pocket, thus avoiding adding to my mortgage payment / debt burden with a home equity loan or re-fi.

    By informal assessment ( I don't want to ask for an official one because they'll raise my property taxes sky high), even in today's upstate NY real estate market my house should now be worth $150k. The same house in a North Jersey burb would carry a $350k-$400k pricetag today. Now, finding qualified buyers in EITHER real estate market is a whole 'nuther story these days ! However, this is a non-issue in my case since I plan on living in 'grandpa's house' until I die !

    On the subject of houses as an investment, I'm not a big believer in owning real estate other than buying the house that you intend to live in for many years. Every property title transfer and every mortgage has associated mandatory transfer costs (a.k.a. closing costs plus tests plus title searches plus attorneys fees), so if you don't plan on owning and living in the same house for at least 7 years these costs become really significant. This is even more true in stagnant real estate markets where you can't count on appreciation in property value to offset these costs !

    Right now, even though real estate prices have declined by 15%+ in some areas, between property taxes and homeowner's insurance and mortgage payments it's cheaper to rent than to own in most markets. This is the direct result of speculative overbuilding, thus there are many property owners who have stopped trying to sell their spec properties at depressed prices and instead are seeking renters to offset (some of) their negative cash flow until real estate market prices recover. IMHO this will remain the case for the next two years at least, as real estate woes continue to worsen.

    The home mortgage interest tax deduction has traditionally been a nice perk ... particularly in states with high income tax rates where the deduction saves money on both federal and state taxes. However, the way that the Alternative Minimum Tax is not getting 'fixed', there is an increasing probability that (some of) the home mortgage interest tax deduction will wind up being disallowed in the future if you have a 'middle class' income. Also, most of the flat tax / income tax reform proposals being discussed lately would also remove the 'value' of the home mortgage interest tax deduction. My only point here is that it is NOT a safe assumption to think that the home mortgage interest tax deduction will remain in effect over the life of a 20 or 30 year mortgage.

    Thus my advice to any prospective homeowner right now is to keep renting for another couple of years, save your money, build your credit rating, and prepare yourself to have a 20%+ cash down payment available to purchase a house at a 'bargain' price a couple of years down the road. With all of the 'subprime' losses resulting in tightening lending standards and higher equity requirements, a couple of years from now there will be VERY FEW people who will be able to qualify for future mortgage loans. Ironically, most of those that will be able to qualify for future mortgage loans (i.e. sufficient income plus sufficient credit rating plus sufficient assets) will NOT be interested in buying a 'starter' house in a less than upscale neighborhood - which should provide some ideal conditions for 'starter' house bargain-hunting !

    Besides saving up the 20% down payment, it will also be a wonderful idea to also save up another $15-20k to cover the cost of immediate repairs / improvements that will be necessary once you buy your bargain 'starter' house, move in, and discover that the roof leaks or the furnace is spewing carbon monoxide or the water heater is ready to puke. Home equity loans and re-fi's to cover home repairs / improvements are going to be even more difficult to procure in the future than new mortgage loans, especially for a new homeowner who has planted all of their assets (savings) into a down payment and whose income versus expenses coefficient has just risen with the advent of a monthly mortgage payment. Needing to perform urgent home repairs and not having the instantly available means to pay for them out of pocket can either lead to postponement with more extensive damage i.e. more serious more expensive home repairs being necessary in the future, or taking on 'expensive' additional debt under whatever sort of terms the lenders are willing to extend.

    ~
    Last edited by Melonie; 12-01-2007 at 06:36 AM.

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    Default Re: how much was your home/apartment?

    Melonie, I bet you look hot wielding a pipe wrench! Great story!

    Oh, and I agree 100% with everything you just said and have been recommending the same for my clients that are looking to buy a first or new home.

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  5. #5
    mermaidnz
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    Default Re: how much was your home/apartment?

    wow! thanks so much for that info Melonie much appreciated!

    $75k is amazing for a house price, i doubt i could even get bare land (500sqM) within a 70km radius for that price sometimes i feel like ive missed the boom,so why bother, and i start saving a home loan, get to $10 or $15k,and get bored with the idea, knowing i still need a further 20K+.

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    Default Re: how much was your home/apartment?

    I'm afraid to post detailed information on the site because I fear certain persons can look up the prices and get some info out of me. But mine cost between 100K-150K and I have 2 mortgages on it because I'm an idiot and got pressured into buying because everyone else was. I had just gotten out of stripping and hadn't saved 20%. I wish I had now. The market value of the place has increased nicely, and others have bought in this same place for about 12-15% higher. Of course, prop. taxes went up too!

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    Default Re: how much was your home/apartment?

    Quote Originally Posted by Melonie View Post
    On the subject of houses as an investment, I'm not a big believer in owning real estate other than buying the house that you intend to live in for many years. Every property title transfer and every mortgage has associated mandatory transfer costs (a.k.a. closing costs plus tests plus title searches plus attorneys fees), so if you don't plan on owning and living in the same house for at least 7 years these costs become really significant. This is even more true in stagnant real estate markets where you can't count on appreciation in property value to offset these costs !
    I agree with this and it's the main reason that Brad and I have decided to buy a house where we plan to retire. We will use that as the vacation home in the meantime since it's in warmer weather. This way, we're putting our efforts into the place we plan to be until we die and we're not wasting the money on hotels since we're there so frequently.

    I'm not about to invest my life in a house that I'm hardly ever in because I'm either at work or on vacation.

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    Default Re: how much was your home/apartment?

    We bought our house last year for $295,000. It's a 2700 square foot house and has everything we need. It's fairly new and needs small things here and there, but overall it was a good investment. It's now been appraised at $315,000 (not like that means anything in this day and age...LOL). But, it does help to refi rate/term and drop the rate a bit with a higher LTV (Loan to Value...rates are also based upon how much your loan is compared to the value on your house. Typically, a mortgager who is at or below 80% LTV will get a better rate than someone who is above that amount).

    It's all about research. And, what you want. If you do not want to buy a house right now, don't. It's a lot of work. Taxes, home owners insurance, mortgage payments, cutting the grass, landscaping, general upkeep and repair. It's definitely not easy to own a house...although it does have it's advantages...no one to tell you what to do (unless, of course, you live in an HOA area)...among other things.

    This is a big decision and if you are not "for sure" you want to buy...don't. Just keep saving money and see where it goes from there.

  9. #9
    242_fair
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    Default Re: how much was your home/apartment?

    There is basically nothing available here in Toronto for under $200,000, and that would be a condo. You could get down to $140,000, but that would NOT be a building you want to live in (roaches and gun crime etc).

    Since I am not likely to stay here after my degree is finished, it makes no sense to buy now, for me.

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    Banned Melonie's Avatar
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    Default Re: how much was your home/apartment?

    Melonie, I bet you look hot wielding a pipe wrench!
    actually, I look even hotter wielding a soldering torch ! I now have to wear carpenter's overalls when I do it though, because I learned the hard way what happens when I drip molten solder on my tits !

    I did do quite a bit of wrench swinging installing the Jacuzzi tub though, but I also had a lot of 'free help' ... no doubt because they thought they would get to help me 'break it in' after the work was done (well actually, one of them did, but that's a whole 'nuther story LOL ....)! But you wouldn't have wanted to see me while I was redoing the bathroom drain plumbing - when a 50 year old sanitary pipe cracked and pissed toilet sludge all over me ! Ahhh, the wonders of home ownership !!!


    $75k is amazing for a house price, i doubt i could even get bare land (500sqM) within a 70km radius for that price
    not to belabor the point in yet another thread, but the reason that I got this $75k deal is that I was the ONLY potential buyer that was 'qualified' and was also interested in buying a 'starter' house in an economically depressed small town. Other 'qualified' buyers in the general area were much more interested in paying twice as much for similar houses in upscale suburbs of nearby cities or in nearby 'upscale' vacation areas (i.e. lakefront properties within 10 miles of me are ridiculously priced - 1/2 a mil for a 1600 sq ft house is pretty common if it also has a boat dock).

    This is why I recommend that anybody who is seriously considering buying a 'starter' house sit tight for the next couple of years ... because by then there will be enough foreclosures / distressed properties, and there will be enough tightening of creditworthiness standards, that YOU may be the only qualified buyer interested in a 'starter' property ! Given a 'motivated' seller, and few / no other 'qualified' buyers, it's likely that you can also name the price that you're willing to pay (within reason of course) and have that offer accepted by the 'motivated' seller.

    Mermaid, if there's any truth in the new projections about Australian interest rates rising as a result of the recent election, having a wad of cash to negotiate with will be more important than ever for future Australian home buyers ! There should also be a pile of 'motivated' sellers i.e. homeowners with adjustable rate mortgages whose mortgage payments will rise right along with those interest rates.

    ~
    Last edited by Melonie; 12-01-2007 at 04:18 PM.

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    Default Re: how much was your home/apartment?

    Quote Originally Posted by Melonie View Post
    actually, I look even hotter wielding a soldering torch ! I now have to wear carpenter's overalls when I do it though, because I learned the hard way what happens when I drip molten solder on my tits !
    Picture! Picture! Of you in overalls soldering, not in pain from burning your boobers of course!

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    Default Re: how much was your home/apartment?

    Quote Originally Posted by mermaidnz View Post
    wow! thanks so much for that info Melonie much appreciated!

    $75k is amazing for a house price, i doubt i could even get bare land (500sqM) within a 70km radius for that price sometimes i feel like ive missed the boom,so why bother, and i start saving a home loan, get to $10 or $15k,and get bored with the idea, knowing i still need a further 20K+.
    Why not move to the U.S.?

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    Default Re: how much was your home/apartment?

    also, you have to remember that real estate wise it is better to build your wealth thru homes/houses than thru apartments/units.

    A block of flats is different yet again to both of them (and it's only worth while if you buy the whole block of flats not just one or two).

    Plus you have to remember that, unlike the USA, land is in short supply here in Australia. Thus the demand is definately outstripping supply in alot of areas.

    We are the opposite in a way to the US real estate wise. Our property prices will only keep going up and up and up and only ever really stagnate.

    The Reserve Bank keeps lifting interest rates as it's trying to keep a lid on inflation which is due to our (Australian consumers) spending.

    We are a totally different environment in real estate compared to the US right now.


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    Default Re: how much was your home/apartment?

    What the shit places are YOU lookin at? I was looking at 460k (my limit) houses in Surfer's only a few months ago!


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    Quote Originally Posted by GoldCoastGirl View Post
    also, you have to remember that real estate wise it is better to build your wealth thru homes/houses than thru apartments/units.

    A block of flats is different yet again to both of them (and it's only worth while if you buy the whole block of flats not just one or two).

    Plus you have to remember that, unlike the USA, land is in short supply here in Australia. Thus the demand is definately outstripping supply in alot of areas.

    We are the opposite in a way to the US real estate wise. Our property prices will only keep going up and up and up and only ever really stagnate.

    The Reserve Bank keeps lifting interest rates as it's trying to keep a lid on inflation which is due to our (Australian consumers) spending.

    We are a totally different environment in real estate compared to the US right now.
    Say what? There's HEAPS more land here than in the US. Heaps. Tons. Massive amounts.


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    Default Re: how much was your home/apartment?

    GCG, there's definitely not a lot of land (well, in anyplace worth building) available in the US anymore.

    Developers have gotten out of hand and there are plenty of buildings and communities full of cookie-cutter homes that are half empty.

    Example: they just built a 55+ luxury condo midrise smack dab on the corner of my little city and it's 95% empty after 8 months. We are stuck with this eyesore that should not have been built on such a small parcel.

    We also have the problem of more and more strip malls going up.

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    Default Re: how much was your home/apartment?

    ^^^ I think that she's talking about 'desireable' locations ... mostly surrounding the big, booming Australian cities. America still has the same situation surrounding big, booming American cities, but there aren't a whole lot of big American cities that are still booming (Greenville Spartanburg SC maybe ?) !!!

    The problem that many American cities have developed, that Australian cities have NOT developed (yet anyhow), is that gov't policies have taxed and regulated to the point where businesses (and their 'middle class' former employees) are forced to move out while social welfare recipients are encouraged to move in. This more than anything has been the cause of declining real estate prices for single family homes in these cities, as it tends to start a vicious circle of rising public expenditures which must be paid for by more tax increases, which in turn pressures more businesses ( and their 'middle class' former employees) to move elsewhere, which in turn further increases the tax burden on businesses and 'middle class' employees that still remain. Two US states which have been drawing a lot of recent news coverage in this regard are New Jersey and Wisconsin. However, where Australia is concerned, it remains to be seen what the future may hold (reference to recent election - Kyoto Treaty - carbon tax etc.).

    Both Australia and America have heaps of undeveloped land available, but for a very good reason !!! Unless you plan on being a rancher or a recluse, wide open spaces 100 miles from 'anywhere' aren't going to be on the top of anybody's wish list.

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    Quote Originally Posted by Melonie View Post
    ^^^ I think that she's talking about 'desireable' locations ... mostly surrounding the big, booming Australian cities.
    Mel, I am in a surrounding area of a big, booming city. It takes me less than an hour to get to Manhattan.

    Even less to get to Morristown and Parsippany, the pharmaceutical capital of the world (and where my offices are)

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    ^^^ Dylan, how are your New Jersey state and local tax rates doing lately ????

    PS the 'water gap' and 'rural' north Jersey are absolutely beautiful areas ! But they're also being expected to help foot the bill for Newark / Camden / Trenton ! In case you didn't know, I used to live on Garrett Mountain ! Had I stayed there the increases in state income taxes and especially property taxes would have bankrupted me !

    ~
    Last edited by Melonie; 12-02-2007 at 07:02 AM.

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    Quote Originally Posted by Melonie View Post
    ^^^ Dylan, how are your New Jersey state and local tax rates doing lately ????

    PS the 'water gap' and 'rural' north Jersey are absolutely beautiful areas ! But they're also being expected to help foot the bill for Newark / Camden / Trenton ! In case you didn't know, I used to live on Garrett Mountain !
    I'm still a half hour away from the Water Gap though I do cross over it to get to Mom who's in PA. I didn't realize that we were funding those areas, but, considering that their watersheds are in our areas and we use those resources, I can believe it.

    Our tax rates are horrible. My brother in law is having a really hard time of it as not only has his risen due to county wide repair assessments, but the value of his home is going down due to the stagnant market around here. So, less value and more taxes. Ugh.

    Wow, Garrett Mountain? Blast from the past Mel! I lived over 10 years in the neighboring city of Garfield and almost married into a very politically prominent family in Paterson (though they lived in West Paterson, lol). My brother had his wedding pix taken up there.

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    Default Re: how much was your home/apartment?

    And speaking of the stagnant market, you knew that bubble had to burst someday. People buying their homes for the normal mid 200's to the low 300's and then, within one year, they're worth in the high 400's?

    Unfortunately, many people I know took out loans based on that inflated value only to see it slide right down the tubes. Those needing to sell their houses are now in the serious negative.

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    Default Re: how much was your home/apartment?

    ^^^ yeah well those needing to sell their houses now are totally screwed ! For starters, they can't re-fi without ponying up $100k plus to cover the shortfall in equity between their outstanding mortgage balance and the present real estate market value of their property. Next, they can't re-fi without proving that they have sufficient gross income plus 'disposable income' (net of other financial obligations) to qualify for a re-fi loan under today's tighter lending standards - which typically means at the very least that their 'new' re-fi'd mortgage payment cannot exceed 33% of their net income. Thus for a $300k mortgage with a $2000 a month mortgage payment, and with say a 28% federal income tax rate plus a 7% New Jersey income tax rate, you're talking about needing a documentable gross income of ~$100k a year on top of the $100k + cash payment to cover the existing mortgage's equity shortfall to even begin to qualify for a re-fi loan.

    PS cool ... West Paterson was just up the road ! But I never saw a greater 'contrast' in socioeconomics than in driving a mile or two up that road ... which goes from suburban shopping malls to upscale homes / horse farms to fancy corporate headquarters to the worst inner city housing projects in literally the space of one or two miles.

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    Quote Originally Posted by Melonie View Post
    ^^^ yeah well those needing to sell their houses now are totally screwed ! For starters, they can't re-fi without ponying up $100k plus to cover the shortfall in equity between their outstanding mortgage balance and the present real estate market value of their property. Next, they can't re-fi without proving that they have sufficient gross income plus 'disposable income' (net of other financial obligations) to qualify for a re-fi loan under today's tighter lending standards - which typically means at the very least that their 'new' re-fi'd mortgage payment cannot exceed 33% of their net income. Thus for a $300k mortgage with a $2000 a month mortgage payment, and with say a 28% federal income tax rate plus a 7% New Jersey income tax rate, you're talking about needing a documentable gross income of ~$100k a year on top of the $100k + cash payment to cover the existing mortgage's equity shortfall to even begin to qualify for a re-fi loan.

    PS cool ... West Paterson was just up the road ! But I never saw a greater 'contrast' in socioeconomics than in driving a mile or two up that road ... which goes from suburban shopping malls to upscale homes / horse farms to fancy corporate headquarters to the worst inner city housing projects in literally the space of one or two miles.
    The difference blows your mind doesn't it? I've never been anywhere that has such vast contrasts.

    In regards to your first paragraph, the current climate around here is one of stoned silence. People so scared that they can't even speak. I can't tell you how many people I know that are dangerously close to losing their homes and are cutting waaaaay back to make those payments, some family of mine included.

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    Banned Melonie's Avatar
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    Default Re: how much was your home/apartment?

    In regards to your first paragraph, the current climate around here is one of stoned silence. People so scared that they can't even speak. I can't tell you how many people I know that are dangerously close to losing their homes and are cutting waaaaay back to make those payments, some family of mine included.
    Well, despite the personal tragedies, this IS a very good object lesson for would-be new homeowners. It is NOT safe to assume that property values never decline, so to avoid putting yourself at future risk of being underwater a 20% down payment is necessary versus 10% or 5% or even 0% down. However I doubt that this will be much of a future issue since mortgage lenders are simply not going to write any more 0% or 5% or 10% down mortgages.

    It is also NOT safe to assume that property taxes will remain 'stable'. As states and cities begin to lose their tax base (i.e. businesses and former 'middle class' employees relocate to other states / countries to avoid high state taxes and strict state regulations), and as states and cities see their social welfare expenditure costs rise (due to residents going bankrupt / jobless, due to people moving in to sign up for generous welfare / medicaid benefits, due to illegal aliens moving in to get sanctuary city status etc.), the shortfall has to be made up by increasing state and local taxes on the taxpayers that remain. This can mean higher state income taxes, but more likely it means higher property taxes.

    It is also NOT safe to assume that adjustable rate mortgages subject to monthly payment changes based on future changes in 'market' interest rates will remain stable either. If you look back in US history to the Carter years, there were periods where mortgage interest rates rose to 14-15% - and this could possibly happen again. Even if the ARM you sign onto has a rate of increase cap (i.e. 1% every 6 months) and a maximum mortgage interest cap (i.e perhaps 12%), the change in monthly payment between the early years 'teaser' interest rate and the capped interest rate can be huge. For the $300k mortgage we were discussing, this would be the difference between say $1000 a month and $3000 a month !

    Lastly it is not safe to assume that if taxes increase and/or if interest rates rise that 'paychecks' will also rise along with them. In fact, with rising taxes causing businesses to incur additional expenses, and with businesses leaving the area increasing local unemployment rates, 'paychecks' in such areas are actually more likely to remain stagnant.

    The bottom line is that 30 years is a VERY long time. When you sign onto a mortgage, you are basically committing yourself to a financial obligation that is subject to LOTS of variables which are beyond your control. In the past, it was possible to ignore some of those variables, and a few of those variables actually worked in the homeowner's favor (like appreciating real estate markets and tax deductibility of home mortgage interest). However, in the future those variables can work against the homeowner ... and if the homeowner isn't prepared to handle the negative consequences they are putting at risk their initial investment (down payment money) plus their credit rating.

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    Default Re: how much was your home/apartment?

    I may be mistaken, but if your house goes down in overall value (meaning that the amount that the house is "worth" versus the amount that you can sell it for), can you not appeal your property tax rate to the state? I thought I read about that somewhere...in passing...but I thought I read that if you were in an area that the tax rates were going up and the value of your home was declining, you could appeal to the tax rate of your home...

    Just something to look into.

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