Housing rebound in Vegas
When I moved here in 2010, I made one gigantic bet: I bought a house. As a general rule I have stayed out of the stock market and other markets. I got into a 15 year loan and my main goal wasn't to do anything but to pay off the house and be done with it. I don't care about appreciation, I just want to get rid of that interest part of my house payment as quickly as possible.
Fast forward to the first part of 2011, and I start a refinance. The rates look lower, awesome. House get appraised and after putting 20% into the down payment for my house, they say I have hardly any equity at all and my refinance can only be approved if I provide cash. So I did. I took all the cash that I had at the time and I used it to get the refinance. That put me back at 20% equity (exactly) and I started over. A full year of payments with zero progress - and 20% of my house price -- VANISHED IN A YEAR -- it was a lot of money!! Yuk! But my payment is lower in exchange for one more year added to the loan and a couple hundred bucks in fees.
Just one and a half year later, and finally my house is finally worth more than I paid for it. Now I don't intend to sell, but as a bet (you sometimes are forced to sell) it has been a really terrible bet until about January of this year.
So even though my gambling at the tables has lost, my one big bet is finally starting to look smart. I still have 12 years to go on the loan without making extra payments, but the prospect of not having a losing bet looks much better since January of this year.
My rate is 3.25% and locked for the duration. I plan to throw extra equity at it (I reduced the principle an extra 5% this year) and hopefully get the loan done in less than ten years from now if I'm lucky enough.
Craps is a hobby, but for those who want to know what bets I'm winning, my house will be paid for, and when it is, I'll have a lot of extra spending money when my house payment goes down 81% from what it is today (when it's just taxes and HOA).
Everything else is paid for and I'm looking forward to a beautiful retirement as soon as possible.
The problem in Vegas right now is there is a ton of "shadow inventory" in pre-REO properties. Until we get off this idea that banks should not foreclose on properties of people who cannot afford to live in it will keep hanging. Most people have the luxury of not seeing what I have seen on that front.
Housing debt free will be the best way to be after 2020 or so.
I'm sure you already know this but I just thought I would throw it out there. Did you make sure when you paid extra on your mortgage did you specifically specify that the extra money was to be applied to principle? If not, some banks especially ones looking for extra profit, will apply the payment as a loan payment on the back end of the note.
I'm on the Dave Ramsey plan, I have no debt outside my mortgage, and I have plenty of equity since I've saved and built it myself. I'm 26 and I'm proud to say I have no other debt, it sure makes everything easier.
Quote: Ahigh
is, I'll have a lot of extra spending money when my house payment goes down le.
Every gamblers dream, lots of money to play with. You
can't play with your winnings, there aren't any.
Quote: AhighWell, I'm happy to report that my biggest investment is winning. It happens to be my house.
When I moved here in 2010, I made one gigantic bet: I bought a house. As a general rule I have stayed out of the stock market and other markets. I got into a 15 year loan and my main goal wasn't to do anything but to pay off the house and be done with it. I don't care about appreciation, I just want to get rid of that interest part of my house payment as quickly as possible.
Fast forward to the first part of 2011, and I start a refinance. The rates look lower, awesome. House get appraised and after putting 20% into the down payment for my house, they say I have hardly any equity at all and my refinance can only be approved if I provide cash. So I did. I took all the cash that I had at the time and I used it to get the refinance. That put me back at 20% equity (exactly) and I started over. A full year of payments with zero progress - and 20% of my house price -- VANISHED IN A YEAR -- it was a lot of money!! Yuk! But my payment is lower in exchange for one more year added to the loan and a couple hundred bucks in fees.
Just one and a half year later, and finally my house is finally worth more than I paid for it. Now I don't intend to sell, but as a bet (you sometimes are forced to sell) it has been a really terrible bet until about January of this year.
So even though my gambling at the tables has lost, my one big bet is finally starting to look smart. I still have 12 years to go on the loan without making extra payments, but the prospect of not having a losing bet looks much better since January of this year.
My rate is 3.25% and locked for the duration. I plan to throw extra equity at it (I reduced the principle an extra 5% this year) and hopefully get the loan done in less than ten years from now if I'm lucky enough.
Craps is a hobby, but for those who want to know what bets I'm winning, my house will be paid for, and when it is, I'll have a lot of extra spending money when my house payment goes down 81% from what it is today (when it's just taxes and HOA).
Everything else is paid for and I'm looking forward to a beautiful retirement as soon as possible.
OK I have to ask, why would someone as smart as you pay even $1.00 extra to pay down the mortgage? Other than piece of mind I don't see the benefit. At your low rate and adding in the tax benefits how does it make sense?
Quote: BozOK I have to ask, why would someone as smart as you pay even $1.00 extra to pay down the mortgage? Other than piece of mind I don't see the benefit. At your low rate and adding in the tax benefits how does it make sense?
What if he feels he can't make out better investing the money, especially after taxes? Interest rates on a 91-day Treasury Note are 0.01% right now.
Quote: AhighWell, I'm happy to report that my biggest investment is winning. It happens to be my house.
I'm still down about 10% from when I purchased in 2009, but hope to be positive in a year or so.
Quote: WizardWhat if he feels he can't make out better investing the money, especially after taxes? Interest rates on a 91-day Treasury Note are 0.01% right now.
Understand the point, but as a younger person long term a basic S&P fund has always beaten 3.5 over time. While past performance does not guarantee future results ( or whatever the disclaimers say) I like most believe strongly in the ability of corporate America to continue to grow profits regardless of what is thrown at them. And while his personal investments are not my business I would make sure to maximize 401K/ IRA contributions to again lower taxes. But it is hard to put a value on piece of mind and it is a personal decision.
Quote: BozUnderstand the point, but as a younger person long term a basic S&P fund has always beaten 3.5 over time. While past performance does not guarantee future results ( or whatever the disclaimers say) I like most believe strongly in the ability of corporate America to continue to grow profits regardless of what is thrown at them. And while his personal investments are not my business I would make sure to maximize 401K/ IRA contributions to again lower taxes. But it is hard to put a value on piece of mind and it is a personal decision.
He may not has as much faith in the S&P as you have. It wasn't that long ago it crashed about 55%. The country is deep in debt and the ratio of people collecting Social Security and Medicare to workers in the labor force is going to keep climbing. We simply can't afford to keep our current entitlement programs without making deep cuts or significant increases in taxes. However, what politician, except maybe Ron Paul, wants to suggest either option? I wouldn't blame anybody over 40 for playing it safe and paying down their debt.
When I see opportunities, I do trade. I consider it gambling and not investing. Those are my big bets, but 90% of the year I do not have positions.
I am not a buy and hold investor. I'm just not and I never have been. I am very skeptical for sure of just about any "product" that is supposed to diversify to keep me safe. I may change my attitude and I may just miss out on long term opportunities. But I don't care. I have enough volatility from the housing market and I am putting a lot away through 401k savings.
And yes, the money I threw down went to principal, not future payments. I paid my principal down over $10,000 in 8 weeks last spring and the transaction history is very clear. I also have written my own custom mortgage calculator software and I know to the cent all the details down to the taxes, HOA, and other fees exactly where my money is going.
Quote: AhighWell, I'm happy to report that my biggest investment is winning. It happens to be my house.
When I moved here in 2010, I made one gigantic bet: I bought a house. As a general rule I have stayed out of the stock market and other markets. I got into a 15 year loan and my main goal wasn't to do anything but to pay off the house and be done with it. I don't care about appreciation, I just want to get rid of that interest part of my house payment as quickly as possible.
Fast forward to the first part of 2011, and I start a refinance. The rates look lower, awesome. House get appraised and after putting 20% into the down payment for my house, they say I have hardly any equity at all and my refinance can only be approved if I provide cash. So I did. I took all the cash that I had at the time and I used it to get the refinance. That put me back at 20% equity (exactly) and I started over. A full year of payments with zero progress - and 20% of my house price -- VANISHED IN A YEAR -- it was a lot of money!! Yuk! But my payment is lower in exchange for one more year added to the loan and a couple hundred bucks in fees.
Just one and a half year later, and finally my house is finally worth more than I paid for it. Now I don't intend to sell, but as a bet (you sometimes are forced to sell) it has been a really terrible bet until about January of this year.
So even though my gambling at the tables has lost, my one big bet is finally starting to look smart. I still have 12 years to go on the loan without making extra payments, but the prospect of not having a losing bet looks much better since January of this year.
My rate is 3.25% and locked for the duration. I plan to throw extra equity at it (I reduced the principle an extra 5% this year) and hopefully get the loan done in less than ten years from now if I'm lucky enough.
Craps is a hobby, but for those who want to know what bets I'm winning, my house will be paid for, and when it is, I'll have a lot of extra spending money when my house payment goes down 81% from what it is today (when it's just taxes and HOA).
Everything else is paid for and I'm looking forward to a beautiful retirement as soon as possible.
@Ahigh
Somebody has to say this, I know other's are thinking it.
So, I guess what your saying here in 10 years +/- when calculating your cost of living,
you will be up against a zero house edge but you still gotta pay the vig?
Quote: petroglyph@Ahigh
Somebody has to say this, I know other's are thinking it.
So, I guess what your saying here in 10 years +/- when calculating your cost of living,
you will be up against a zero house edge but you still gotta pay the vig?
Yeah, those damn HOA's and real estate taxes. LOL. My lifestyle is relatively modest. I hope to maintain a modest lifestyle and be able to retire a little bit earlier.
Playing craps is very cheap! The only variation in my retirement lifestyle will be whether I am passing the Maserati store or the $3 spaghetti sign on the way to the table.
The relief is welcome here. We're coming off a peak where 80% of homes were underwater (almost everybody). I stayed above water by brute force rather than good timing.
I maxxed out my 401k in June this year.
Quote: Ahighhttp://www.vegasinc.com/news/2012/jul/12/fewer-las-vegas-homeowners-underwater-mortgages
The relief is welcome here. We're coming off a peak where 80% of homes were underwater (almost everybody). I stayed above water by brute force rather than good timing.
I maxxed out my 401k in June this year.
Applause. Great job. I had you figured for a work a day guy. If you have those kind of resources, I'm done talking.
