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Old 06-28-2012, 07:30 PM
 
1,163 posts, read 1,964,340 times
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Quote:
Originally Posted by abri07 View Post
I think you should have a min of one years expensives saved.
I don't disagree with you, the more the better! Some people look at you like you have two heads when you recommend even a 4 to 6 month emergency fund... so I don't normally mention a 1+ year fund, but you are right on!
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Old 06-28-2012, 07:58 PM
 
Location: Wouldn't you like to know?
9,114 posts, read 15,676,091 times
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Quote:
Originally Posted by amploud View Post
I don't disagree with you, the more the better! Some people look at you like you have two heads when you recommend even a 4 to 6 month emergency fund... so I don't normally mention a 1+ year fund, but you are right on!
+3...

A main reason why we are in the shape we are in as a country financially is because people didn't plan properly to whether the storm in case of financial hardships....

This thread is a perfect example.

Say the OP puts 20% down and doesn't have a pot to **** in...

What happens when he loses his job? What happens if he gets medical bills that insurance doesn't cover??

Most people don't think ahead unfortunately.....

ONLY put 20% down if you have sufficient $$ to whether a financial storm.
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Old 06-28-2012, 08:25 PM
 
551 posts, read 1,194,726 times
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I've been debating on whether to get a house or not. I can afford one but I like to have the option to relocate to another city for work for short term assignments like 2-3 years. I can't do that as easily if I am tied down by a mortgage.

If i were to, I'd like to have 2+ years of emergency funds saved up. You can never have enough for a rainy day or year! I don't play with credit either.
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Old 06-28-2012, 09:05 PM
 
368 posts, read 813,921 times
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Quote:
Originally Posted by vmaxnc View Post
Umm...what?

It's Beemer, BTW.
If you're talking about cars, it's actually 'bimmer'.

'beamers' are bmw motorcycles.
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Old 06-29-2012, 04:22 AM
 
3,914 posts, read 3,957,710 times
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My advice is that it is more important to set a goal to be debt free by a certain stage in your life and then adjust your mortgage/down payment to make this possible. Despite what your banker, real estate agent, and friends & relatives in debt will tell you, the best thing you can do for your financial future is to get out of it. If you pay off your house and all other debt by the time you are say, 45, then you will have years and years of that house payment to use, save & invest as you please.

Getting to debt free will do more for your financial future, independence from crappy work conditions, etc. than most anything else you can do, and the good thing about it, is that you are completely in control of the outcome. No guessing the markets, how the economy will do, if you will have a job or not, etc.

IMO, the minimum that people should have before buying a house is 20% down + a years emergency expenses in some sort of savings. If you don't have this much, then you are not ready to buy a home. If people had followed this rule we would not be having a real estate meltdown now. These 3%/5% down FHA loans are like crack cocaine and the end result is almost always the same.
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Old 06-29-2012, 05:40 AM
 
5,893 posts, read 7,748,067 times
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Quote:
Originally Posted by frewroad View Post

IMO, the minimum that people should have before buying a house is 20% down + a years emergency expenses in some sort of savings. If you don't have this much, then you are not ready to buy a home. If people had followed this rule we would not be having a real estate meltdown now. These 3%/5% down FHA loans are like crack cocaine and the end result is almost always the same.
I think it's kinda funny that the same people that say this are probably the same people that paid $100K for a house in the 80's and sold it for $250K in the mid 2000's, and then blame the people that got loans without 20% down for their house now only being worth $200K. Newsflash, if people only got loans with 20% down, then your house would've never appreciated nearly that much to begin with (yes everyone knows homes appreciated too much, but it would have been much much less). For one, it was a lot easier to put down 20% when the average house is only $100K or less. Yeah, they should not have given out loans to people that clearly could not afford them with crazy adjustable rates or balloon payments, but when you can get a fixed interest rate below 4% with 3.5%-5% down then that is certainly doable.
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Old 06-29-2012, 07:04 AM
 
3,914 posts, read 3,957,710 times
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Quote:
Originally Posted by GoPhils View Post
I think it's kinda funny that the same people that say this are probably the same people that paid $100K for a house in the 80's and sold it for $250K the mid 2000's, and then blame the people that got loans without 20% down for their house now only s thabeing worth $200K. ...
But this doesn't make any difference. The party that sold the house is now homeless. They have to spend that $200K somewhere else in order to purchase a home. Furthermore, anyone buying a home in the 1980s was dealing with interest rates above 10% and in the early 80s as high as 18-20%. i.e. buying a $100K house then was a whole lot harder and took a lot more sacrifice than buying a $250K home now. The difference between someone who paid off their home vs someone who took a 30 year loan and made minimum payments is the paid in full guy has close to an extra $100K in equity and 10s of thousands more in saved interest in his pocket.

In any case, it doesn't change what I said. It's not the payment you are making or the interest you are paying. The only important thing is the amount you owe and how long it will take to pay it off. For people who are only focused on how much home they can get for as small a payment they can make, this concept is quite difficult to understand. In these days of declining real estate prices buying a home with as little down as possible makes no sense. There is a good chance they will put themselves underwater and at best have put themselves into permanent servitude to the bankers.
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Old 06-29-2012, 07:43 AM
 
Location: Fort Mill SC
194 posts, read 368,150 times
Reputation: 174
Bought a house in Fort Mill last year with 3.5% down and no mortgage insurance....and got to keep money in the bank. Really can't beat that in my opinion
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Old 06-29-2012, 07:48 AM
 
335 posts, read 591,202 times
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Quote:
Originally Posted by amploud View Post
I don't disagree with you, the more the better! Some people look at you like you have two heads when you recommend even a 4 to 6 month emergency fund... so I don't normally mention a 1+ year fund, but you are right on!
I agree. The rule of thumb that most financial planners give is to have 6 months of income saved. But if you are talking about just expenses, rather than total income, then you would want to aim closer to a year's worth of expenses in saving.
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Old 06-29-2012, 08:00 AM
 
335 posts, read 591,202 times
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[quote=frewroad;24953875] Furthermore, anyone buying a home in the 1980s was dealing with interest rates above 10% and in the early 80s as high as 18-20%. i.e. buying a $100K house then was a whole lot harder and took a lot more sacrifice than buying a $250K home now. quote]

I wish interest rates were 18-20%. That would drive down housing prices so low that I could pay cash for a house, and not pay any interest at all - better yet I could be receiving interest on my savings instead of the 0% I earn now. But 18-20% will never happen again, because it would benefit the working, saving man more than it would benefit the banks.
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