Post #220,022
8/18/05 9:24:07 PM
8/19/05 10:18:28 AM
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Forget it.
Appreciate the advice, mostly stuff I knew already, I'm just a whiny twit.
apt-get install godlike-powers
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Post #220,027
8/18/05 10:06:43 PM
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Housing goes in cycles.
1) I don't know the details of the PacNorWest, but in many parts of the country, especially along the coasts, housing prices have risen to extreme levels. Renting may make more sense than trying to buy now.
2) Are you in [link|http://www.metrokc.gov/dchs/csd/housing/1stTime.htm|King County]? Take advantage of programs like that if you can - your tax dollars are funding them. Ask them what you qualify for as far as assistance goes - you might be surprised.
In buying your first house, you probably don't want to put 20% down. It used to be that you had to put that much down so that you didn't have to pay PMI - Private Mortgage Insurance. Now it's possible to put much less down (even zero in some cases) and get a second mortgage (at a higher rate) to cover the 20%. The advantage? PMI isn't deductable (and 2nd mortgages are), and though it's supposed to be cancellable once you have 20% equity, it can be (or used to be) difficult to cancel it. Do what you need to do so that you don't have to pay PMI. When you're starting out, you probably want your mortgage interest deduction to be as large as possible, so you probably don't want to put a lot down. Interest rates will bounce around a little in the next few years, so you'll be able to do a re-fi and combine the 1st and 2nd into a new 1st that may have a lower interest rate.
Don't get an interest-only loan, and don't get an ARM unless you understand what happens when (not if) interest rates rise. Refinancing is easy now, but may be difficult or impossible if rates rise significantly.
3) Cars are a real pain. My wife's 1993 Corolla needed a rear strut (no damping at all) and the shop said all of them were "weak" and they wanted to replace the tires too (mild cupping). Their initial estimate was it would have been $2300 to have them do everything. (Yikes!) As it was, it was $875 for the rear struts and a 4 wheel alignment.
Is there a chance you or Susan could start carpooling?
Digging ones self out of a tough situation involves 3 things in my experience: 1) Persistence. You can't give up. 2) Working smart. Do what you can to impress people you come in contact with that you're smart, you work hard, and that you're good to have around. 3) Work on improving your luck. A lot of stuff is outside your control, but we make at least part of our luck. :-) Keep your wits about you and look for new opportunities.
I sympathize, Thane. Life's tough for lots of people these days. Hang in there and keep slugging away - it will get better.
HTH a bit. Good luck!
Cheers,
Scott.
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Post #220,031
8/18/05 10:26:17 PM
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at 3 months shy of the 50 been there my entire adult life
at least I have the bridge I want to live under in my dotage picked out. Now unless you have an extreme imperative to live where you are, find a job in a place you can afford to live. A MS in Social Work can translate into a school councillor in the right neighborhood. The best way to do a mortgage is 5/15/80 which is 5% down second mortgage ARM for the next 10 years for the next 15% and a first 30 year fixed for the balance. If you must live where you are, you are relatively young couple, look for the gay guys. Typically they will find a rundown section with possibilities and buy in and renovate. If you know of any folks of that persuasion ask them questions. They are usually the first into a gentrification project. If you join in, work like a dog doing repairs in a down trodden neighborhood you will reap equity awards.
Me I would find a place that doesnt seem to suck too bad and has decent housing prices, haul wife along and go wherever young man. At your age with no kids I would look at Huntsville Alabama, Pascagoula Mississippi and other places that have low housing prices and jobs that dont pay too bad in our industry. Omaha Nebraska is also high wage for the local living in what we do.
Again unless family is a deal breaker move. It sounds like from posts that your family out there is nothing you couldnt do long distance with so assume that susan has close relatives that are near by that you feel comfortable being near. Ask them for advice.
In all cases do it not out of desparation but adventure.
good luck,
thanx.
bill
"the reason people don't buy conspiracy theories is that they think conspiracy means everyone is on the same program. Thats not how it works. Everybody has a different program. They just all want the same guy dead. Socrates was a gadfly, but I bet he took time out to screw somebodies wife" Gus Vitelli
Any opinions expressed by me are mine alone, posted from my home computer, on my own time as a free american and do not reflect the opinions of any person or company that I have had professional relations with in the past 49 years. meep
questions, help? [link|mailto:pappas@catholic.org|email pappas at catholic.org]
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Post #220,064
8/18/05 11:44:51 PM
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Well said. You're fortunate to have been able to do that.
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Post #220,032
8/18/05 10:29:39 PM
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Note...
Most people these days are buying houses with a lot less than 20% down. Think 10%. Or 5%.
I won't comment on how wise that is, but the question these days is whether you can afford the mortgage payment, not whether you have enough down.
As for whether it gets better, it definitely can. If you're making more than you're spending, then it is already getting better. If you're out of debt, then you're in a position to start making money on what you've saved. Build up an emergency cushion, then start investing. It is hard to see the rate of change, but when it takes off, it takes off nicely. If you are investing a constant sum every year and your investments average 10%/year, then after 5 years of investing, you've made 54 cents for every dollar invested, after 10, 85 cents for every dollar that you put in, after 15, 140 cents, and after 20 years, 320 cents.
If the investment return is only 5%, then those figures become 36, 42, 58 and 79 cents respectively. (Followed by 104 and 136.)
If you've worked off a debt, then you are right now climbing out of an inverse hole with a higher interest rate.
In recent decades, stocks return about 10%/year. But after tax returns are going to be lower, and they vary a lot. Plus you're not going to want all of your savings in something that risky.
I don't know how old Susan is, but most women can safely push off baby plans into their 30s. Starting at 35 you're supposed to have extra tests. For most women, the clock stops ticking around 38 - at the start of that year most can have a baby, at the end most can't. If you don't think you can afford a baby yet, you may not have to.
Of course looking forward to the future is always risky. You can lose your job. You may find that your salary options improve unexpectedly. House prices generally go up. But lots think that they may go down quite a bit soon. (Which won't mean that they are more affordable - housing prices and interest rates are inversely correlated so that the mortgage payment and rent stay connected.)
Random book recommend: Smart Couples Finish Rich.
Cheers,
Ben
I have come to believe that idealism without discipline is a quick road to disaster, while discipline without idealism is pointless. -- Aaron Ward (my brother)
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Post #220,052
8/18/05 11:30:45 PM
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My wife's mother was 42 when she was born in 1961.
There are always counter-examples. I just thought I'd throw one out.
It does get riskier as the woman gets older though. And it can be hard on the children to have old parents...
Cheers,
Scott.
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Post #220,056
8/18/05 11:32:34 PM
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Re: My wife's mother was 42 when she was born in 1961.
Aging parents is really hard on children. I'm at the other end of the scale; I'll be 38 when my son is 18, and I'm really glad it worked out that way.
Peter
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Post #220,057
8/18/05 11:35:05 PM
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They ain't called "tax deductions" for nothin' :)
Just thought I'd point out that while you do have to spend money on the little buggers, at least you end up with a tax refund in April. And, even though you are looking at the expense of childcare, that too is deductible.
FWIW,
Amy
"The notion of limited government and frugal government has been shattered by this administration, which cares far less about limited government than it does in building conservative government - a government with huge payoffs to corporate America," Allan Lichtman, a presidential historian at American University in Washington.
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Post #220,058
8/18/05 11:39:22 PM
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Not in the UK, you don't.
Peter
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Post #220,067
8/18/05 11:51:00 PM
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Sux 2BU :-D
"The notion of limited government and frugal government has been shattered by this administration, which cares far less about limited government than it does in building conservative government - a government with huge payoffs to corporate America," Allan Lichtman, a presidential historian at American University in Washington.
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Post #220,061
8/18/05 11:42:43 PM
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Yup.
I went to high school with a guy who got his girlfriend pregnant, and married her, before he graduated. I'm sure it was hard on them early on, but I'll bet they were very glad their offspring was out of the house by the time they were 35. Physically, we're much better equipped to handle the stress of raising children when we're younger. (Usually not financially and often not emotionally though.)
In my wife's case, she was always worried about her parents dying, even when she was a little girl. "They were always so old!" Her father was over 60 when she graduated from high school....
There's also the example of the fellow at work who adopted a young child when he was about 55. Although I applaud him for wanting to help raise a child in need, I also really wonder about his thought processes...
Cheers,
Scott.
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Post #220,066
8/18/05 11:48:17 PM
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Teenagers shouldn't have to care for their parents, imho
When the hormones are raging, you're trying to pass your exams and the whole world is agin ye, the very last thing on earth you need is parents who need caring for.
While I can see why people do leave it late to have children (financial security, etc) I'm half-inclined to think that's a selfish attitude.
Peter
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Post #220,069
8/19/05 12:09:08 AM
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People are living too long.
I think our bodies evolved very well for a species that lived to ~ 40 years of age.
1) Born.
2) If you survive the childhood diseases, etc., you've got it made!
3) Hormones kick in. WooHoo! Fun times!
4) You have your children at 18-22 years old.
5) Raise kids, impress rivals with strength and cunning.
6) Kids start to grow up, help with chores, help protect the homestead.
7) Kid notices unattached beauty down the road. They get hitched.
8) Kids turn 18, just in time for them to take over running the homestead.
9) You enjoy your golden year or two, wander off into the woods, and get eaten by a bear.
10) The end.
If doesn't make sense for kids to have hormones running at 11 for a few years, have to wait a few more years to be able to start their adult life and to be able to support their offspring, then live another 50-70 years. We should have shorter life expectancies or the mating instinct should come later. But as it is, [link|http://pediatrics.aappublications.org/cgi/content/full/108/2/347|girls are maturing earlier] than they were years ago. Things are heading the wrong way on both ends.
We're going to have to start fighting (or changing) our biology on a major scale, or society is going to have to change in major ways, because otherwise there are going to be too many children raising children.
The missus and I have always felt that we didn't want children. There is the little issue about what we'll do in our "golden years".... I've joked with her that we can adopt some 17 year old kids when we're ready to retire.
"Hey missy and sonny, take care of us and you'll get a nice reward!"
:-/
Cheers,
Scott.
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Post #220,079
8/19/05 7:57:34 AM
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lrpd 1-10 please
"the reason people don't buy conspiracy theories is that they think conspiracy means everyone is on the same program. Thats not how it works. Everybody has a different program. They just all want the same guy dead. Socrates was a gadfly, but I bet he took time out to screw somebodies wife" Gus Vitelli
Any opinions expressed by me are mine alone, posted from my home computer, on my own time as a free american and do not reflect the opinions of any person or company that I have had professional relations with in the past 49 years. meep
questions, help? [link|mailto:pappas@catholic.org|email pappas at catholic.org]
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Post #220,087
8/19/05 9:38:05 AM
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ObCRC-ism:
How do you get to be 42yo at birth?!? I guess being born in 1961 does things to you....
;-\ufffd
jb4
shrub\ufffdbish (Am., from shrub + rubbish, after the derisive name for America's 43 president; 2003) n. 1. a form of nonsensical political doubletalk wherein the speaker attempts to defend the indefensible by lying, obfuscation, or otherwise misstating the facts; GIBBERISH. 2. any of a collection of utterances from America's putative 43rd president. cf. BULLSHIT
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Post #220,094
8/19/05 10:02:03 AM
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Erg.
In 1961, my wife was born. Her mother was 42 at the time. My wife's mother was 42 when she - my wife - was born in 1961. My MIL was 42 when my wife was born in 1961. Or, more succinctly[link|http://bau2.uibk.ac.at/sg/python/Scripts/MeaningOfLife/MontyPythonstheMeaningofLife|:] Now before I begin the lesson will those of you who are playing in the match this afternoon move your clothes down on to the lower peg immediately after lunch before you write your letter home, if you're not getting your hair cut, unless you've got a younger brother who is going out this weekend as the guest of another boy, in which case collect his note before lunch, put it in your letter after you've had your hair cut, and make sure he moves your clothes down onto the lower peg for you. HTH. Cheers, Scott.
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Post #220,104
8/19/05 11:26:00 AM
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On the coasts, rents & mortgages are no longer connected
so that's one reason why many think we're in a housing bubble.
Also, look at the percents for various types of mortages; in prime bubble areas, the riskier loans are common, e.g. this year SFBA I/O loans are over 50% of new mortages.
Tony
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Post #220,124
8/19/05 1:14:22 PM
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They are very much connected
Money is being concentrated into fewer and fewer pockets and those pockets need to do something with it. The wealthy are competing with each other to buy homes, driving the price of homes way up.
They must do something with those homes and about all you can do with them is rent them out. This has resulted in a glut of homes for rent with rusulting downward pressure on rent.
[link|http://www.aaxnet.com|AAx]
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Post #220,127
8/19/05 1:37:11 PM
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Partially right
The truly wealthy have reduced real instate investments.
However, there is a lot of speculation in real estate, people buying homes based on assuming that the price will go up. That's the only way an I/O loan makes sense. And it's not the wealthy that are taking out all those I/O loans here; my guess is that it's a mix of speculators and people feeling "If I don't buy now I'll never be able to buy, and I'll be able to refinance in five years".
Only time will tell what happens, but it seems a lot like the dot-bomb boom to me.
Tony
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Post #220,046
8/18/05 11:01:06 PM
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What Box said
You could do yourself a huge favour by relocating in-country.
Property costs plummet when you get away from the coast.
A few years ago I'd have said "come to the UK!" but property over here has gone completely fruitcake; the house I bought in 1997 for \ufffd33K is now worth about \ufffd100K.
That's $180K for a terraced house with no garden and on-street parking, in a rural town far, far from London. And Mike can attest to the fact that although it's nice, it isn't very big.
There's always crime, of course.
Peter
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Post #220,054
8/18/05 11:31:28 PM
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Amy chimes in
Don't forget to check out the foreclosures. You can often find a sweet deal in an established neighborhood for a significant discount. You can look them up on HUD's foreclosure listings. Don't have the url, but you can google it.
Another good book, don't laugh, is Personal Finance for Dummies. I gave a copy to my best friend who was living in a crappy townhouse in Gaithersburg, MD. Within a couple of months, they were building their dream house in Germantown. They borrowed against his 401K for some tax advantages and instant cash. Purchased the house for low 300's, sold it for high 600's after only 7 years!
Also, if you are a vet, there are special programs for $1 move in. Educate yourself about all the options available in the mortgage industry. You will feel more confidant and won't be taken advantage of because of ignorance. (example, separate mortgage insurance policy rolled into the note...just pads the realtor's wallet.)
Good luck and keep thinking positive. You will be amazed at the results.
Love and Peace,
Amy
"The notion of limited government and frugal government has been shattered by this administration, which cares far less about limited government than it does in building conservative government - a government with huge payoffs to corporate America," Allan Lichtman, a presidential historian at American University in Washington.
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Post #220,096
8/19/05 10:57:51 AM
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?
It rarely hurts to seek advice. Don't beat yourself up.
Cheers,
Scott.
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Post #220,109
8/19/05 11:40:03 AM
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I know what the problem is.
It's not the handling of finances, it's the albatross of student loans that total 3x my wife's yearly income, at 7% fixed interest. She got a degree in Psychology, started before and finished after the state raised the bar incredibly high for new psychologists - she would have to pay around $20k out of pocket to get prequalified for the test, then there is the test itself which requires around six months of dedicated study. Of course, all the existing certified psychologists got grandfathered in. She did not get her degree in social work, and since there's an oversupply of social workers, she can't easily transition over that way.
Our family lives in state, although not nearby - but there's no good paying work for me in the areas they live. Good paying = enough to survive on while trying to dig out from under student loans. Wherever we go, that monthly payment drags us down.
apt-get install godlike-powers
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Post #220,111
8/19/05 11:48:07 AM
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what are the quals for psycologists in other states
A year in a place less stringent to get a license then see if its transferrable back to washington.
Or pick a place where she can use her education to make a decent living. Get out from under the loans,
thanx,
bill
"the reason people don't buy conspiracy theories is that they think conspiracy means everyone is on the same program. Thats not how it works. Everybody has a different program. They just all want the same guy dead. Socrates was a gadfly, but I bet he took time out to screw somebodies wife" Gus Vitelli
Any opinions expressed by me are mine alone, posted from my home computer, on my own time as a free american and do not reflect the opinions of any person or company that I have had professional relations with in the past 49 years. meep
questions, help? [link|mailto:pappas@catholic.org|email pappas at catholic.org]
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Post #220,119
8/19/05 12:53:07 PM
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Re: what are the quals for psycologists in other states
1st, you have to be relicensed in the state. This means 6 months to a year of 'internships', I.E. unpaid work, depending on the state. Then you're back to where she is now, but getting certified at that point varies from state to state.
The other thing holding us here is I have two very old grandparents with not much longer in this world - and we're not willing to leave until they have, unless there's a "sure thing" waiting at the other end.
apt-get install godlike-powers
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Post #220,126
8/19/05 1:36:36 PM
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reason to stay for sure
"the reason people don't buy conspiracy theories is that they think conspiracy means everyone is on the same program. Thats not how it works. Everybody has a different program. They just all want the same guy dead. Socrates was a gadfly, but I bet he took time out to screw somebodies wife" Gus Vitelli
Any opinions expressed by me are mine alone, posted from my home computer, on my own time as a free american and do not reflect the opinions of any person or company that I have had professional relations with in the past 49 years. meep
questions, help? [link|mailto:pappas@catholic.org|email pappas at catholic.org]
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Post #220,144
8/19/05 3:39:34 PM
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I assume you're deducting that interest.
I was going to say that this would be another reason to try to buy a house, but it looks as though you don't even need to itemize to claim the deduction. [link|http://www.irs.gov/taxtopics/tc456.html|IRS]: Topic 456 - Student Loan Interest Deduction
You may be able to deduct up to $2,500 for interest you pay in 2004 on a qualified student loan. And, if your student loan is canceled, you may not have to include any amount in income.
The deduction is claimed as an adjustment to income so you do not need to itemize your deductions on Schedule A Form 1040 (PDF). The devil, of course, is in the details of the loan... It's not a lot, but every little bit helps. Hang in there. Cheers, Scott.
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Post #220,117
8/19/05 12:14:23 PM
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Dude - just buy something
Don't sweat the 20% down. Yes you will pay mortgage insurance for awhile (which is a total racket) but at the rate real estate is climbing, you'll have 20% equity in no time, then refinance to eliminate the mortgage insurance.
Stop paying rent and buy something decent (which I know is hard right now since there is high demand and not a lot of inventory - you have to be fast). Other advice, go see a mortgage company now and get pre-qualified so you can slap down your pre-qual letter at offer time and lock something up.
Real estate is most definitely the current ticket to the good life in the US. Don't know how long it will last, but right now that seems to be how people are moving up and building wealth.
"Whenever you find you are on the side of the majority, it is time to pause and reflect" --Mark Twain
"The significant problems we face cannot be solved at the same level of thinking we were at when we created them." --Albert Einstein
"This is still a dangerous world. It's a world of madmen and uncertainty and potential mental losses." --George W. Bush
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