Homestead mailing list

["SISU!" <erthnsky AT bellsouth.net>]

Clansgian AT wmconnect.com wrote:

> The problem for some people in the burst isn't that housing values 
> will drop, but rather that they will fail to continue rising.  Many a
>  poor dope has bought real estate with questionable financing based 
> on the idea that it doesn't matter how much it costs to float the 
> loan, the price of the house is going up so fast he's covered no 
> matter what.

Dopey indeed.  I was never much on gambling of any sort, and I consider
this thinking in investing, a gamble.


> Worse still are the people who were told by smarmy lenders that they
>  had increased equity in their house and why not "use" some of that 
> equity.

Every day, I get notices from my lender about how I could get a heloc
and use my equity to pay off other debts.  Very often, it's tempting
considering how much work we have to do on this old house, but I simply
don't want more debt.  I've worked hard to reduce debt all the way
around, and I can see the light at the end of the tunnel now.  It's bad
enough that we will soon have to cough up dough for some major
appliances and possibly a vehicle, but I want to do that without using
credit at all, even low interest credit.  However, without the kids
being here this past year, and with no major deductions, we took a real
hit income tax wise, so on down the road, I may get a second mortgage,
probably not a heloc, just to have some interest to write off as well as
to fund some repairs on the house.  For right now, however, that's not
in the picture.


It's the foolishness that's driven much of the economy these
> past few years, the illusion that one's house, because it was 
> appraised for a lot more money than you paid for it, was oozing and 
> growing money from all corners!    It is amazing at the number of 
> people who never grasped the idea that you can't live in your house 
> and spend it too.

I have always been afraid of having too much tied up in a mortgage...If
something happens, I don't want to lose *everything* because it is tied
up in the mortgage.


> But in the case you describe, Bev, I'd think there's not much to 
> worry about. With only 11 years to go on a mortgage and no plans to 
> sell unless you have to,  a housing bubble will not affect you at 
> all.

Good news.  Thanks.
Since we have a small 401k that won't go far in retirement, our goal has
been to simplify our lives as much as possible not only to reduce our
spending now, but to make life easier once Ron retires.  I don't want a
mortgage, and since his job is physical, he may not be able to work into
his 60's.  We refinanced simply to avoid him having to work later, but
of course, that means working harder now.  After he retires, we should
be able to get by on income from his woodworking and social security, if
it is still around in 20 years, which I don't hold my breath on.  In the
best of all possible worlds, the house should be paid off when he is 57
and still working, which would allow us to do some traveling with the
money we would have otherwise spent on the mortgage.
I just want to consider all options as you know life has a way of
messing up your best laid plans.  I'll never be rich. I'll never be
'comfortable'.  I am just trying to survive to a degree that I won't be
a burden on anyone else, and if we *can* do things like travel, well,
that will be icing on the cake.

Bev
--
erthnsky AT bellsouth.net  BevanRon of EarthNSky Farm      NW Georgia USDA Zone 7
34.498N 85.076W