Suze Orman advice...

[RichD]

Re: Suze Orman advice...

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Gen</div><div class="ubbcode-body">she is saying that people have been 'walking away', rather than pay the 700,000 mortgage on a home that is now worth, 200,000.

mi nuh think she seh dem muss walk away.

mi nah leff mi house and mash up mi fico score if mi can AFFORD fi pay it, after mi a nuh speculator. </div></div> she said it does not make financial sense even if you can afford it...to me that is advising people to walk away

[Gen]

Re: Suze Orman advice...

a guess she think the 5,000 mthly mortgage payment can get a better rate of return if it compound in the stock market for eg over 15 years, as opposed to the equity being built in the house over same period :

and that if the person walk away now, dem fico score can be rebuilt

[RichD]

Re: Suze Orman advice...

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Gen</div><div class="ubbcode-body">a guess she think the 5,000 mthly mortgage payment can get a better rate of return if it compound in the stock market for eg over 15 years, as opposed to the equity being built in the house over same period :

and that if the person walk away now, dem fico score can be rebuilt </div></div>

but that will drastically increase the default rate and deepen the banking crisis..sound irresponsible to me.
the market value of your house is irrelevant unless you trying to sell it.

[Gen]

Re: Suze Orman advice...

agreed.

me personally nah walk weh from it if mi can afford it, all when mi cant afford it mi will rent out the room dem fi pay the mortgage. no sah, mi nuh like lose anyting if mi lass 1 dollar mi feel like bawl

[Dr.Dudd]

Re: Suze Orman advice...

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: RichD</div><div class="ubbcode-body"><div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Gen</div><div class="ubbcode-body">she is saying that people have been 'walking away', rather than pay the 700,000 mortgage on a home that is now worth, 200,000.

mi nuh think she seh dem muss walk away.

mi nah leff mi house and mash up mi fico score if mi can AFFORD fi pay it, after mi a nuh speculator. </div></div> she said it does not make financial sense even if you can afford it...to me that is advising people to walk away </div></div> I would not try to pay $700,000 for something that is worth only $200,000. That is equivalent to giving away $50,0000.
The difference should go towards my retirement.
This is not the first time this happened. In the early 90's the federal government allowed FHA to take over a lot of overpriced mortgages,and sell them at 40% an 50% discounts. That is what will happen,if enough people walk away.
when you sacrifice your pension for the economy that can correct itself,who is going to feed you when you retire??

[RichD]

Re: Suze Orman advice...

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Dr.Dudd</div><div class="ubbcode-body"><div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: RichD</div><div class="ubbcode-body"><div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Gen</div><div class="ubbcode-body">she is saying that people have been 'walking away', rather than pay the 700,000 mortgage on a home that is now worth, 200,000.

mi nuh think she seh dem muss walk away.

mi nah leff mi house and mash up mi fico score if mi can AFFORD fi pay it, after mi a nuh speculator. </div></div> she said it does not make financial sense even if you can afford it...to me that is advising people to walk away </div></div> I would not try to pay $700,000 for something that is worth only $200,000. That is equivalent to giving away $50,0000.
The difference should go towards my retirement.
This is not the first time this happened. In the early 90's the federal government allowed FHA to take over a lot of overpriced mortgages,and sell them at 40% an 50% discounts. That is what will happen,if enough people walk away.
when you sacrifice your pension for the economy that can correct itself,who is going to feed you when you retire?? </div></div> so whent he economy recovers will the value of the property not return?

[Dr.Dudd]

Re: Suze Orman advice...

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: RichD</div><div class="ubbcode-body"><div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Dr.Dudd</div><div class="ubbcode-body"><div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: RichD</div><div class="ubbcode-body">[quote=Gen]she is saying that people have been 'walking away', rather than pay the 700,000 mortgage on a home that is now worth, 200,000.

mi nuh think she seh dem muss walk away.

mi nah leff mi house and mash up mi fico score if mi can AFFORD fi pay it, after mi a nuh speculator. </div></div> she said it does not make financial sense even if you can afford it...to me that is advising people to walk away </div></div> I would not try to pay $700,000 for something that is worth only $200,000. That is equivalent to giving away $50,0000.
The difference should go towards my retirement.
This is not the first time this happened. In the early 90's the federal government allowed FHA to take over a lot of overpriced mortgages,and sell them at 40% an 50% discounts. That is what will happen,if enough people walk away.
when you sacrifice your pension for the economy that can correct itself,who is going to feed you when you retire?? </div></div> <div class="ubbcode-block"><div class="ubbcode-header">Quote:</div><div class="ubbcode-body"> so whent he economy recovers will the value of the property not return? </div></div>

Not normally .'.. inless in another bubble.

The value of property is normally based on the income of the people living in them.
The incomes never return to the levels, because the houses are usually over priced.
and even of the house returns to that price in 20 years, you would have lost your 'opportunity cost' over that period of time.

opportunity cost is equal to what you would have earned it you had paid the real value as against the value after 20 years.