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Posted
Aug 25 2009, 05:57 AM
by
Karen Datko
Rating:
Money Blog: Smart Spending Blog - MSN Money
This devil's advocate post comes from Jim Wang at partner blog Bargaineering.
A few years ago, when the housing market was sizzling hot, everyone and their mother talked about how their home was a fantastic investment. They talked about how a home that sold 10 years ago had quadrupled in value over the last five and cursed themselves for not buying more.
I knew someone who owned four rental properties, all bought with adjustable-rate mortgages, and was making a "killing" on the rents and appreciation. I knew someone else who was looking at his paper riches and marveling at how wonderful homeownership was.
Then the housing market stalled. ARMs reset. People were in rough shape. Those who overextended learned something the prudent have always understood: As much as your home is a great place, it's not an investment.
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Posted
Jul 08 2009, 12:13 PM
by
Karen Datko
Rating:
Money Blog: Smart Spending Blog - MSN Money
A new study indicates that 26% of homeowners who quit paying the mortgage can afford to pay but no longer want to because they owe more than the house is worth.
The economists who did the study call this a "strategic" default. Time magazine reports:
"They can still afford to pay but they decide not to," says Paola Sapienza, a finance professor at Northwestern University and one of the paper's authors. "It's very easy to do this in the U.S."
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Posted
Jun 29 2009, 11:42 AM
by
Karen Datko
Rating:
Money Blog: Smart Spending Blog - MSN Money
This guest post comes from "vh" at Funny about Money.
Sometimes I think the modest things I have in life are so much better than anything I could buy for a zillion dollars. Maybe I suffer from the sour-grapes syndrome. But ... well, you tell me. Is this sour grapes or common sense?
This morning La Maya invited me to go with her to an estate sale in one of the tonier parts of the far northwest Valley. The sale organizer touted "upscale" goods in a "4,000-square-foot house." So shortly after dawn cracked, we set out for the ocean of orange tile roofs that is the westside.
When we got to the neighborhood where the sale took place, we found ourselves in one of those curvilinear tracts where all the stuccoed houses look pretty much the same. This homeowners association dictated dust-brown paint with mud-brown trim. It being a fancy tract, some of the houses had stone facades: dirt-brown granite, every one. If you came home late at night and three sheets to the wind, you'd never figure out which of the half-million-dollar shacks was yours.
But seriously: The area was clean, obviously expensive, and very nice. I guess.
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Posted
Mar 24 2009, 09:23 AM
by
Karen Datko
Rating:
Money Blog: Smart Spending Blog - MSN Money
This guest post comes from Frank Curmudgeon at Bad Money Advice.
There was a time when owning the roof over your head was considered an attainable and wholesome mark of prosperity for American families. See, for example, the higher calling for which George Bailey gives up his youth in "It's a Wonderful Life." (In retrospect, George was making subprime loans from a dangerously overleveraged and illiquid bank. It was a simpler time.)
Over the decades, conventional wisdom on homeownership morphed from wholesome goal to sound idea, then to great idea, and finally to such a great idea that it was practically free money.
Then it all went kablooey, and conventional wisdom started denying that it ever said any such thing.
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Posted
Mar 23 2009, 06:17 AM
by
Karen Datko
Money Blog: Smart Spending Blog - MSN Money
This post comes from J.D. Roth at partner blog Get Rich Slowly.
I called my little brother recently. He lost his home to foreclosure last fall, and things have continued to only get worse. He and his wife are doing the best they can, but they feel overwhelmed.
"What's the latest?" I asked. Tony gave me an update. We talked about his problems with insurance, and with the bank, and with the debt-settlement service. We talked about his options for the future.
"All things considered, I guess we're doing OK," Tony said. "But to be honest, we've thought about relocating to Kansas."
"Kansas?" I said. "Why Kansas?"
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Posted
Mar 11 2009, 06:55 AM
by
Karen Datko
Rating:
Money Blog: Smart Spending Blog - MSN Money
This post comes from partner blog The Dough Roller.
Last week President Obama announced the details of his Homeowner Affordability and Stability Plan. The housing program has two key features: the Making Home Affordable Refinance Program, and the Making Home Affordable Modification Program. Both are designed to help homeowners stay in their homes, either by refinancing or restructuring their current mortgage. And the modification program also has a feature that can result in reducing your mortgage by $5,000 over five years.
Before we look at each program, it is important to note that they are implemented through banks and mortgage companies. There is no special application to fill out and submit to HUD or some other government entity.
For the refinance program, any mortgage broker or bank can tell you if you qualify and also process your refinance application through the program. For the modification program, your existing mortgage company can tell you if you qualify and process your application.
With that, let's look at each program.
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Posted
Jan 13 2009, 04:09 PM
by
Karen Datko
Rating:
Money Blog: Smart Spending Blog - MSN Money
Many things about micro houses appeal to us: Easy cleaning, teeny tiny utility bills, reduced clutter, plus affordability and portability. With many of these designs, if you have to move, you can take your house with you.
After reading about tiny houses, our 1,000-square-foot two-bedroom house seems huge. We don't really need to use, heat and clean all this space. And many of these tiny houses are so cozy and cute.
We suspect that Tumbleweed Tiny House Co. homes most often come to mind when people think about micro houses. But we've found plenty of other options, including little houses that float.
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Posted
Jan 02 2009, 05:05 AM
by
Karen Datko
Rating:
Money Blog: Smart Spending Blog - MSN Money
This post comes from Trent Hamm at partner blog The Simple Dollar.
Several readers have written to me with various comments, suggestions and questions related to the small-house movement. Given that it's a great way to save money -- as I'll discuss below -- I thought it'd be worthwhile to investigate the movement in detail.
What is the small-house movement? From the Web site of the Small House Society:
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Posted
Dec 05 2008, 02:35 PM
by
Karen Datko
Rating:
Money Blog: Smart Spending Blog - MSN Money
Randall at Credit Withdrawal already liked Bank of America's online My Portfolio feature. And now the bank has added an even more fascinating option. You can sign on and watch the value of your home drop. Randall is hooked. "It's like driving by a car wreck," he wrote in a guest post at Cash Money Life. "You don't want to look, but you can't help but stare. As a people, we're fascinated with disasters, and my home value going down at this rate definitely qualifies as a disaster in my book."
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Posted
Nov 14 2008, 05:12 PM
by
Karen Datko
Rating:
Money Blog: Smart Spending Blog - MSN Money
"Miss M" at M is for Money has a sense of humor about her predicament. She called her post "If my house is underwater, where is my ocean view?" This post will help people who live where housing prices are reasonable and stable -- yes, these places exist -- to understand how others could owe more on their homes than they're worth. For those of you who have firsthand experience with this problem, maybe you won't feel so all alone.
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