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I am accelerating to pay off my home. I have a line-of-credit of 3% I used to build a new home and am aiming to pay it off in 5 years before rates start rising.
I am accelerating to pay off my home. I have a line-of-credit of 3% I used to build a new home and am aiming to pay it off in 5 years before rates start rising.
Why not refinance it at 4.25% or whatever for 30 years? Certainly you can find better things to invest in that are inflation protected than to pay off real estate. I never quite understood the obsession with paid off real estate unless you just can't get a loan for it. Let the bank take on the risk of inflation while you control more assets and get a tax write off to boot.
a paid off mortgage is right up there with marriage. its one of lifes goals for many good or bad..
meeting goals by having the money to do it shouldnt be mixed with money thats left on the table for meeting other goals that havent been met.
if i ear mark money thats invested for a purpose when i hit that goal i either buy the goal or take it out of the risk pool and hold on to it until i buy that goal. what i dont do is leave it at risk once i achieve my goal.
the other goals that im striving for are still left invested to grow until they too meet their goal.
Do you punch yourself in the face so hard you are knocked out and then when you regain consciousness declare "I won my fight by knockout"??? That is pretty much what you did here. If the dollar is debased then the house will be worth multiples more than the currency. I mean that is pretty basic thinking.
I just love your line at the end. The Fed is not the US government. I think we all have agreed on that. And QE1 is was much larger than QE2, why now all the whining? Simply put its because even without QE2 the dollar was going to decline. Its simple economics, a country with a trade deficit and slower economic growth than most of the world is going to see its currency decline. QE2 is just an easy scapegoat. But the Fed has only its own interests to look out for and that interest is to keep liquidity in the banking system. The residue of the strategy may ultimately be a weaker dollar, but the noise over this is getting insane. If QE2 was $5 trillion maybe all this whining would make sense, but its not even close to that amount.
At its core QE2 is not stupid and its not the real cause of significant currency devaluations. But just like in the recent elections politicians and the people in general can't be bothered with the idea that maybe, just maybe, the economy is a complex creature. They want easy soundbite material and blame the Fed (essentially unelected bureaucrats) for printing money is about as easy as it gets.
What your argument fails to take into consideration is retaliatory actions of the central banks of other countries. What we are beginning to see now is what has been termed a race to the bottom.
Central banks throughout the world are acting to devalue their currencies to match the devaluation of the dollar. When currencies devalue in unison it removes any positive benefit from the action.
My argument is that the value of the dollar is being artificially driven lower by FED policy, while at the same time real estate value is being artificially supported by government and banking policies. I do not believe either policy is sustainable in the long run. Do You?
A fully paid for roof over your head is worth more than a million worthless dollars.
Actually, in my area it's worth -40,000 per year - the cost of taxes, home maintenance, heat, interest and insurance.
What your argument fails to take into consideration is retaliatory actions of the central banks of other countries. What we are beginning to see now is what has been termed a race to the bottom.
Central banks throughout the world are acting to devalue their currencies to match the devaluation of the dollar. When currencies devalue in unison it removes any positive benefit from the action.
My argument is that the value of the dollar is being artificially driven lower by FED policy, while at the same time real estate value is being artificially supported by government and banking policies. I do not believe either policy is sustainable in the long run. Do You?
Sure why not? Most of the world has more expensive real estate than the US and they don't get things like mortgage interest deductions or Fannie and Freddie to prop up housing. Even without these things people will still want to own houses and still be willing to buy them. There might be a slight price correction to reflect higher interest rates meaning higher payments, but I doubt it would amount to much.
I frankly think people just worry too much. The economy works in spite of the government. If they have to rein in their controls on it I doubt it tumbles down.
Good question and one I'm hearing asked a lot lately.
Homes in my area are down to 1990 prices and this doesn't account for the fact that a 1990 dollar had greater purchasing power.
I think in any scenario the buying power of cash will continue to be eroded.
On the other hand, the cost of building permits and zoning regs continues to escalate as well as the associated fees for utilities and many building materials...
Shiploads of 5 million board feet of lumber continue to go out of Olympia WA for Asia... just because we have a building slump doesn't mean there isn't willing buyers on the world market... same for copper, cement, roofing etc.
My only fear with Real Estate is annual taxes and fees may spike to feed government.
When currency becomes worthless... real things such as land and commodities become even more valuable.
if it got so bad that currancy has been devalued so much that its near worthless i doubt there will be many affording buying much of anything so values of things may actually drop. inflation is only good for rises in things in a range then all bets are off.
with homes down to 1990 prices i would venture to say most salarys arent as low as they were back then. i know i took a 30% pay cut with job changes this year but im still well a head of 1990's salary.
Sure why not? Most of the world has more expensive real estate than the US and they don't get things like mortgage interest deductions or Fannie and Freddie to prop up housing. Even without these things people will still want to own houses and still be willing to buy them. There might be a slight price correction to reflect higher interest rates meaning higher payments, but I doubt it would amount to much.
I frankly think people just worry too much. The economy works in spite of the government. If they have to rein in their controls on it I doubt it tumbles down.
Why not? Because bubbles are not sustainable. Because wages are declining. Because the housing crash came from unaffordable housing prices to begin with.
The fact is despite all the tricks and mirrors, real estate prices are continuing to decline.
Here in California, banks are sitting on a 9 year housing supply at present sales volume.
So long as you have massive supply and poor demand, you will have lower prices.
Good question and one I'm hearing asked a lot lately.
Homes in my area are down to 1990 prices and this doesn't account for the fact that a 1990 dollar had greater purchasing power.
I think in any scenario the buying power of cash will continue to be eroded.
On the other hand, the cost of building permits and zoning regs continues to escalate as well as the associated fees for utilities and many building materials...
Shiploads of 5 million board feet of lumber continue to go out of Olympia WA for Asia... just because we have a building slump doesn't mean there isn't willing buyers on the world market... same for copper, cement, roofing etc.
My only fear with Real Estate is annual taxes and fees may spike to feed government.
When currency becomes worthless... real things such as land and commodities become even more valuable.
That is key I think because eventually that land and those commodities can be traded down the road for the "new currency" or corrected currency.
If you have a fully paid house and times did get bad..the ONLY payment you would have to make are the yearly RE taxes to the county.
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