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Old 09-17-2008, 07:42 AM
 
Location: Pennsylvania, USA
5,217 posts, read 4,114,844 times
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Quote:
Originally Posted by rtjr View Post
You've got my attention - what's your strategy in a nutshell?

I think there are some very relevent questions that must be asked first;

Are you single, married or married with kids?
Where in the U.S did you purchase these homes?
What years were they purchased in?
If you were single were you living at home with your parents or with relatives when saving up?
Did you have employer based health insurance or
Did you elect to not have insurance?

All this is relative to your ability to save the money required for a down payment on a home.

I'd be interested in your strategy in any of these situations.. as far as what expenses you had, what you went without and how long it took to save up the amount. The price of the houses you purchased are relevent as well. For example, on LI NY starter homes are min $300K..and that's pretty cheap still even in this market (unless you are buying a foreclosed property that is in complete dissaray.)

Last edited by TristansMommy; 09-17-2008 at 07:52 AM.. Reason: Had other relevent questions. :)
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Old 09-17-2008, 08:11 AM
 
Location: Montrose, CA
3,031 posts, read 7,868,609 times
Reputation: 1925
Quote:
Originally Posted by TristansMommy View Post
I think there are some very relevent questions that must be asked first;

Are you single, married or married with kids?
Where in the U.S did you purchase these homes?
What years were they purchased in?

I'd be interested in your strategy
It's not rocket science. Save money every month and invest wisely. Use credit minimally or not at all (I prefer regular but minimal use in order to keep my credit score up, just in case I need it). Don't buy new cars. Don't eat out much, don't buy prepackaged food, and carry a lunch to work. Et cetera...

As far as the other questions go, both houses were in California, 1994 and 2003. Single with two kids, and my income was the only income involved. No child support or alimony. I made a decent profit off the first house when I sold it. That went straight into the purchase of the other house, with some left over. Buying for cash has insulated me very well against the current market collapse.

Right now, I get paid twice a month. One check goes straight into my investment fund. The other is for all my bills etc. It doesn't take long to amass quite a bit of savings when you're investing half your income, even if you don't make a great deal of money. The only thing that I'm really feeling the change in right now is the price of gasoline, and I can deal with that for a while. If it gets too high, then I'll alter my strategy a bit to buy a vehicle that gets better mileage (but still it won't be new).
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Old 09-17-2008, 08:37 AM
 
Location: Pennsylvania, USA
5,217 posts, read 4,114,844 times
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Quote:
Originally Posted by SuSuSushi View Post
It's not rocket science. Save money every month and invest wisely. Use credit minimally or not at all (I prefer regular but minimal use in order to keep my credit score up, just in case I need it). Don't buy new cars. Don't eat out much, don't buy prepackaged food, and carry a lunch to work. Et cetera...

As far as the other questions go, both houses were in California, 1994 and 2003. Single with two kids, and my income was the only income involved. No child support or alimony. I made a decent profit off the first house when I sold it. That went straight into the purchase of the other house, with some left over. Buying for cash has insulated me very well against the current market collapse.

Right now, I get paid twice a month. One check goes straight into my investment fund. The other is for all my bills etc. It doesn't take long to amass quite a bit of savings when you're investing half your income, even if you don't make a great deal of money. The only thing that I'm really feeling the change in right now is the price of gasoline, and I can deal with that for a while. If it gets too high, then I'll alter my strategy a bit to buy a vehicle that gets better mileage (but still it won't be new).
Well.. my current living expenses find it difficult for me to invest half my income. Although that will go down, but I doublt I 'll be able to save half.

The 1993 purchase really helped you quite a bit. You made some nice money on your home when you sold it, which is nice. I'm trying to come up with a better strategy for saving.. but it's difficult even after trimming everything it's still hard to savethat much.
but we'll see.. . moving into a different situation which should help. OUr goal is to try and purchase the house we will be renting should we like it and mostly, if not all cash.. so we have little or no mortgage at all.
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Old 09-17-2008, 08:43 AM
 
127 posts, read 378,480 times
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Quote:
Originally Posted by SuSuSushi View Post
I made a decent profit off the first house when I sold it. That went straight into the purchase of the other house, with some left over.
That's the key. Unfortunately, most people in todays market, especially first time homebuyers do not have this benefit. It's a lot easier to save half your income when you have no mortgage
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Old 09-17-2008, 09:19 AM
 
Location: Montrose, CA
3,031 posts, read 7,868,609 times
Reputation: 1925
Quote:
Originally Posted by TristansMommy View Post
Well.. my current living expenses find it difficult for me to invest half my income. Although that will go down, but I doublt I 'll be able to save half.

The 1993 purchase really helped you quite a bit. You made some nice money on your home when you sold it, which is nice. I'm trying to come up with a better strategy for saving.. but it's difficult even after trimming everything it's still hard to savethat much.
but we'll see.. . moving into a different situation which should help. OUr goal is to try and purchase the house we will be renting should we like it and mostly, if not all cash.. so we have little or no mortgage at all.
Having no mortgage is really nice.

And yes, I realize that not everyone can instantly or easily put themselves into my situation. However, it is possible to not live outrageously. People need to wean themselves from their slavery to credit. Once you do that, life becomes a lot easier. Too many people spend more than they make, or signed up for ridiculous mortgages that they had no hope of paying off...

I live very simply for the most part, and once or twice a year I'll take a chunk of my savings and go on a nice trip. That's my "luxury" for the year, and it works very well for me.
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Old 09-17-2008, 11:22 AM
 
52 posts, read 97,107 times
Reputation: 21
Quote:
Originally Posted by SuSuSushi View Post
Hey, you bought it. How about actually paying for it? I know, I know, that's a ludicrous concept to so many people.
With all due respect, your comment is way too much of a generalization. You seem very judgmental in many of your comments on this board. I think that you shouldn't assume everyone is a deadbeat, and realize that there are extenuating circumstances in a lot of these situations. You shouldn't judge someone unless you've walked a mile or too in their shoes. Just my humble opinion.
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Old 09-17-2008, 07:26 PM
 
Location: Broward County
2,518 posts, read 9,697,341 times
Reputation: 1333
Quote:
Originally Posted by TristansMommy View Post
First of all.. lets get something straight here..

I bought a house and put money down. Yes.. I made a mistake in buying the house with an ARM.. (I have told my story throughout hte boards so I wont' go into it here)

When I went to refi I couldn't.. and so the payments adjusted from $3300/month to $4060 a month ( I was paying a 6.95% interest rate that adjusted 3% in the first adjustment and coudl go up from there depending on the LIBOR).

I tried for MONTHS to get it modified.. they wouldn't do it.

Come January I tried to pay ATLEAST the $3300 I HAD been paying.. they wouldn't accept PARTIAL payment... only the FULL monthly payment.

And that I just don't have every month..

So.. we had a decision to make.. bottom line is we were going to loose our house..

REfi was out, as the market tanked, our equity was gone AND the improvements we made didn't even help the value (new roof, boiler etc.. we put those things in because it needed it !!! We bought one the the LEAST expensive homes in the modest neighborhood at the time!!!).

So.. we stopped paying the mortgage because we simply couldn't.. Still tried speaking with the bank but the bank wasn't budging.

Next thing we decided to do was to short sale the house... the bank approved us short selling and it was on the market..

IN the meantime, while we were in the process of shortsaling , we weren't paying the mortgage because a) the monthy payment was no longer doable.. B) we were already walking away with NO money so why put even more in to pay down principle and interest.. kind of ridiculous and doesn't make sense and c) we needed to take that money and put it aside to replenish what we lost in fixing the fixer upper we bought so that we could find a rental and move out of state.

How exactly responsible would it have been to continue to pay what i couldn't afford for a hosue I was going to leave leaving myself 1) without a roof over my head and penniless afterward.

Many people may scold TristansMommy....but she is brilliant and savy in every which way. She is looking at it from a business stand point because she is smart and I commend her for it !
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Old 09-18-2008, 07:28 AM
 
Location: Land of Free Johnson-Weld-2016
6,474 posts, read 13,418,964 times
Reputation: 6404
Quote:
Originally Posted by NYSinger View Post
What's going to happen is that your credit score will go so low after 90 days of not paying your mortgage that no landlord is ever going to allow you to rent.
I am a landlord and and I should say that I would personally be more understanding about a mortgage default than I would about prospectives who just didn't pay credit cards, medical bills or student loans. In light of the numbers of people defaulting on home loans that they could not afford, I think it would be unfair not to consider their circumstances when considering their applications. You can discuss any issues with the landlod before or after he/she has the results of your credit score. If you pay your other bills and are a law-abiding applicant with sufficient income to pay the rent with ease, the landlord may choose to ignore a default. This is just my two cents. (no spell check)
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Old 09-18-2008, 08:18 AM
 
Location: San Diego
32,821 posts, read 30,068,682 times
Reputation: 17698
What I don't get is why would anyone buy a house when they could barely afford it. If you put all your other monthly bills on paper and you have enough left over to barely make a payment why would you even think about it? One broken car or family emergency and you are toast. It just doesn't make sense.

I can understand if someone lost their job, went through a divorce or other money issues but to lose your house because your ARM adjusted or rate went up completely just blows me away.

Is someone that embarrassed to say they rent?
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Old 09-18-2008, 08:44 AM
 
Location: Pennsylvania, USA
5,217 posts, read 4,114,844 times
Reputation: 908
Quote:
Originally Posted by 1AngryTaxPayer View Post
What I don't get is why would anyone buy a house when they could barely afford it. If you put all your other monthly bills on paper and you have enough left over to barely make a payment why would you even think about it? One broken car or family emergency and you are toast. It just doesn't make sense.

I can understand if someone lost their job, went through a divorce or other money issues but to lose your house because your ARM adjusted or rate went up completely just blows me away.

Is someone that embarrassed to say they rent?
Well.. i can say that our budget was tight with very little wiggle room.

It wasn't that I was embarassed to rent.. but it was that iw as tired of having to move from rental to rental .. and the pickins are/were slim where i'm from..

When you have kids.you wnat to stay in one place.. make roots. i grew up in the same house for my entire life.... same SD and lifelong friends. If you rent, there is no guarantee of that atleast where I'm from.

And what is available to rent in way of house is just.. well icky sometimes...

Just to give some insight into the thought process..
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