Posted on 12/11/2006 8:58:01 AM PST by Doghouse Riley
EVERY day, Will Hertzberg owns a little less of his three-bedroom house in Corona. Like hundreds of thousands of other homeowners around the state, Hertzberg has a mortgage that lets him choose how much he pays each month. Like many of them, he always chooses to pay as little as possible.....But his debt is swelling, and his mortgage company controls his fate.
"I am rather screwed," he said.
....
Hertzberg bought his house 11 years ago for $129,995..... Comparable homes in his neighborhood fetch more than $400,000...... Over the years he has taken out $190,000 in cash through refinancings......Hertzberg's home equity paid off his credit cards, financed trips around the world that allowed him to indulge his passion for photography, bought a $32,000 Toyota Avalon and enabled some lousy investments. "Free money always has the unfortunate effect of making people go overboard," said Hertzberg, whose living room is strewn with financial publications including American Cash Flow Journal and Donald Trump's "How to Get Rich." "You'd be surprised how fast $190,000 can go."
(Excerpt) Read more at latimes.com ...
And surprisingly, no one wants to hire him!
Do you live in Cali or NC??
Bing-o!
Born in Spring Lake, NC. Lived in Cal since 1959.
I believe its a good time to buy IF you find something you love. Otherwise I thing the market has another 12 months of correcting for the bargains to start. If the market is slow this spring the fear will begin through the rest of the year. I may be wrong, but I don't see any fear driven selling yet.
"bought a $32,000 Toyota Avalon"
Did you finance it for 30 years, like this dumb___ did ??
When did lack of financial planning by others, become a crisis on my part????
I'm a buy and hold guy. I agree with your comment. But I'd rather have the RE market appreciation with the 9-1 leverage than the stock market at 1 to 1.
Thanks for the replies,
We bought just as the market was taking the upswing. 30 year fixed loan. We plan to live in the house (tract home) ~ 2000 sq. ft. 4 BR 2 BA, as long as my company keeps me here. No moving up or around. Couldn't afford to anyway. Similar floorplans sold in the low $300's but that was around the time the market started to soften. I don't believe the home is worth that. The first owners didn't make any improvements worth mentioning, buy any upgrades and the yard was/is a disaster. (That's in work with a lot of sweat equity)
We are making exterior improvements, patio slab, patio cover, landscaping, etc. Also going to update and remodel the kitchen and baths. Replacing a sliding glass door with French doors, carpet with more durable and appealing flooring (hardwoods, tile). Of course painting goes with that as well. A little at a time. We're not looking to chunk ourselves another $20k into debt in one fell swoop.
Most of what we have planned are twofold, comfort and hopefully some return based on comps in the neighboorhood as most folks in our area have not made noticeable improvements to their homes.
We are saving for retirement, as well as my military retirement income. The wife works part time at the school our son attends and we use her income to pay off debts that we've been paying down.
We resist the urge to spend spontaneously. The HELOC is prime + 0.25%. I understand about the variability/volatility of such a loan, that's why we're not maxing it out. Spend a little, pay it down/off, then spend a little more. We save cash as well to offset the borrowing.
I appreciate your insights. Thanks
SZ
LOL!
Permanently flatten doesn't have anything to do with it. All it takes is a bad year or two in the market and timing such that you are upside-down on your loan when your ARM re-adjusts.
People who take ARMs bet their entire future that their house will appreciate. Real estate, over the long term, is a fine investment, no doubt, but I'm not willing to roll that kind of dice with my (and my family's) life.
The predictions are inconsistent. Go up this summer or 2008 take your choice.
Near us in Fallbrook the prices are up 4%, so what market are you talking about. There are many RE markets.
Earlier, I discussed a 595,000 overlooking the ocean. I don't think I'd wait on that.
The inventory is high, that you certainly won't risk much if you wait out 2007 or just watch month to month. Unless you don't own and you're paying a lot of income tax.
"my" = by
Moderation is everything. You can also wait your live renting. By your standards I never would have bought a house, but at the high water mark I had 5. We never had other debt and that is what made it possible.
Only if you are 100% loan to value.
This guy is a freakin' idiot.
>>Texas and Panama, two places he has thought about moving, aren't so appealing that he wants to be broke there.<<
What, and being broke in California is better?
Actually, I'd rather he NOT come to Texas.
best wishes.
We put him in a 400,000 condo in Huntington Beach. He has a roommate paying $1,000. He's has more cash than when he and the roommate were renting in Redondo Beach before.
What part of the world is the $595 looking over the ocean? I think there will be some bargain waterfronts when people figure out what new flood insurance cost. Prices are somewhat steady in NoVA, but sales are down significantly as people have refused to sell lower. Spring will be interesting. Last time we went through this in the early 90's it took about 4 years for prices to stabilize and begin to recover.
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