Home Ownership Accelerator Calculations
Prior to purchasing any sort of home ownership accelerator, one should carefully examine their own ability with a calculator and decide whether the numbers work. The average American moves every seven years. As such one should always calculate with a long term savings as the primary goal. This is similar to the points situation. Often, if you’ve paid points to lock in a good rate, it can be beneficial to keep ones house and rent it out rather than selling when you move.
Use of a third party financial consultant can in the end pay off if you find yourself unable to reasonably budget or calculate for your own financial future.
The Candidates Cannot Save the Economy
Sadly, it would appear that none of the leading Presidential candidates offer a clear solution for the housing disaster:
Let us not be fooled. The candidates thus far have nothing substantial to offer us. The problems we face are huge, and the candidates not only seem to have no clue, but no real plan. It is a shame our nation lacks real leaders who will say plainly and forcefully: “This is what we ought to do, this is what we are going to do, and this is how we are going to get it done.” It’s a greater shame that we lack the intellectual and moral fortitude to vote for such a plain-speaking person. We are about to get the government we deserve.
Those facing adjustable rate mortgage disaster may be considering services such as home ownership accelerators in order to escape rising debt. Such action should be carefully reviewed prior to being pursued.
Why the Bailout?
A priceless quote from PrudentBear is worth repeating here:
There are those who can afford their adjusted interest rate; these homeowners need no assistance. There are also a substantial number of homeowners who haven’t been making payments at the starter rate on their subprime loan and may not have the financial wherewithal to sustain home ownership; some of these homeowners will become renters again.[ Bold added] A third category of homeowners might choose to refinance their mortgage - putting them in a sustainable mortgage while keeping investors whole. This is the first, best option. Servicers should move quickly to assist those who can refinance. And the fourth category is those with steady incomes and relatively clean payment histories who could afford the lower introductory mortgage rate but cannot afford the higher adjusted rate. We are focusing on this group,[Bold added] determining who they are and what steps may appropriately assist them. December 3, 2007 Remarks by Treasury Secretary Paulson
And yet, we now the find the government preparing to bail out those who least deserve it and ignore those that could use some legitimate help. Thanks, that’ll certainly serve as a home ownership accelerator for the needy…
The Loss Of The American Dollar
iTulip is providing some interesting insight into the fall of the American dollar. As the dollar declines, it becomes more difficult for the average worker to afford living in the US, but at the same time, such a decline can serve as a home ownership accelerator in making mortgages easier to pay down.
When I was growing up my father gave us Confederate money to play with. I often asked how much it was worth. At age eight, I couldn’t believe these intricately engraved bills that pictured high ranking leaders with denominations of four zeros were worth little more that their value as paper.
In 1990 my wife and I took the short flight from Bangkok to Ho Chi Min City. It was during the first years Vietnam allowed Americans in after the war. You couldn’t book a round trip. You had to buy your return ticket with dollars after arriving in Vietnam. A government official confiscated our passports and followed us everywhere. Our tour guides were also the waiters at the restaurant, the musicians at the dinner show, and the clerks in the souvenir shop. U.S. credit cards weren’t accepted, but our dollars caught every vendor’s attention. They were worth at least twice the posted exchange rate. Not anymore.
At the market near the Rex Hotel we paid 10,000 dong (one U.S. dollar) for a large basket. It is tightly woven and still solid twenty years later. The man behind the hotel desk laughed at me. Refusing to believe the real price was ten cents, I’d overpaid by 1,000 percent. I left Vietnam having no idea what a dong or a dollar was worth. The 10,000 dong note was followed by the 50,000 note that same year, the 100,000 in ‘94, and the 500,000 in 2003.
When it takes sixty dollars to fill a gas tank, the dollar bill is in danger of becoming a paper dime. If a five dollar bill doesn’t buy a beer in Europe, it’s on the way to becoming a fifty-cent piece.