Homestead mailing list

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

Lisa K.V. Perry wrote:

> Many people took ARMs because at .50 less interest rate than a fixed 
> rate loan (that was the average difference between a 30 year fixed 
> and an ARM in my area), the person could afford to purchase more 
> house.

I just don't understand this mentality.  Why gamble when you can have a
sure thing? (fixed rate)  I guess people with money are more optimistic
than people without.  The whole concept of buying "more house" is just
foreign to me.  Why?  Why do people feel the need to impress others so
much?  I do get embarrassed by my little shack in the woods sometimes,
but I know it is a lot more than some people have, and I also know that
I, too, could live beyond my means....but again, why?  Why take the
chance that one's health would fail and lose all that one has worked so
hard for?  In the big scheme of life, houses are just things...they can
be rebuilt or replaced.  For me, experiences and moments are more valuable.


 These people didn't bank on when the ARM period was done
> (many are for three years) and it adjusted to today's rate--anywhere 
> from 1 to 2% higher at first bump--and their monthly payment 
> increases accordingly.  Then add to the larger house payment the fact
>  that gas used to be expensive when it hit $1.50/gal. and now it's 
> nearly double.

Gambling....
A lot of those people are also house poor.  They have a big house with
no furnishings.


> As far as interest only loans, it's worse.  The people often put down
>  as little as possible--many are 100% loans--and they hope to get 
> equity in their home by the value continuously raising over time as 
> most homes did in the last ten years or so.

I had a realtor tell me that I *would* move, because everyone does.  I
didn't argue because I know he was speaking his own truth and he didn't
know me that well, but I have to say here that I will fight tooth and
nail to save this place, my home.  I want to die right here.



> Yes.  You're in a good situation, Bev.  You intend to stay put, don't
>  owe much and don't have much time left to pay.

It's good to know that I am on a sound path, at least as sound a path as
possible for someone with a mortgage.  I try to be conservative with money.


> You know, the mortgage industry began offering 40 year amortization 
> terms in the last couple of years--to again let people have the 
> absolute lowest payment possible to afford to buy more house.  My 
> husband and I would laugh about it, we called them 
> have-a-mortgage-payment-until-you're-95 loans and other appropriate 
> names.

I know.  Why do people in their 40's get 30 year or even 40 year loans?
 To me, it makes no sense to have a mortgage during the retirement
years.  It's gonna be hard enough to pay the medical and all the other
bills then, especially with inflation and if the economy takes a dump,
why in the world would anyone want a mortgage beyond retirement age?


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