Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Old 02-05-2008, 09:53 PM   #41
Thinks s/he gets paid by the post
 
Join Date: Nov 2005
Posts: 2,119
Quote:
Originally Posted by Buku View Post
I approached USAA about a $20k home equity loan to complete the finishing of my basement. Instead of financing on my creditcards, ill do a tax deductable HE loan. I have been doing one thing at a time (Like plumbing, or electrical) then saving a little and doing some more etc. Decided to juts finish it off because I am tired of fooling with it.

Some background:
I put down 120k on a 570k purchase in 2005.
My credit score they used for risk assesment was a 758. (I never have problems).
Home equity loan…declined due to insfufficient equity in my house.
I called USAA and demanded to speak to a manager and talked about my 20 year relationship with them, my never having been late on a single mortgage payment in the 5 houses I have bought through them over the years. Yada yada.
Nothing.
My house is listed in a declining market and the appraisal they did was 520K. (Still giving me 70k in equity)….

They wouldn’t give me the loan. things are different now.
The people who bought my old house in NJ in the spring of 06 for 520K now have it on the market for 420K and no bites, nothing. Another house in the neighborhood sold for 385K last month! The same HOUSE! A toll Brothers model with the exact same things built on the same street the same year in a good area in NJ. The bank is saying no to you because the apprased value of 520 COULD BE 100K TOO high!!
__________________

__________________
newguy88 is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 02-05-2008, 09:56 PM   #42
Thinks s/he gets paid by the post
 
Join Date: Nov 2005
Posts: 2,119
Quote:
Originally Posted by Retire Soon View Post
Consumer currently accounts for 70% of GNP, up from 63% in 1980. Much of this increase can be attributed to the easy credit that we've enjoyed over the past few decades in the form of credit card spending and people using their home equity as a checking account.

In just the last four years, 34,000,000 households have taken money out of their homes --which amounts to 1/3 of homeowners spending the precious equity they've accumulated. This means they're borrowing heavily "to finance their day-to-day lives.

It's now time to pay the piper as lending institution across the U.S. are tightening up on credit standard both in secured home loans and unsecured credit cards. Because of the evaporation of easy credit, consumers are now heading to Wal-Mart instead of Nordstroms. Conspicuous consumption is giving way to trying to making one's dollar go the furthest.

Credit counselors report that they are receiving desperate calls from not only people of modest means, but also people who earn six-figure incomes. These high wage earners are disillusioned as they don't know how to exist without easy credit. They've maxed out both their credit cards and mortgaged their home to the hilt, and they don't know what else to do now that they can no longer shop until they drop.

Extravagance in consumer spending has resulted in people placing less money in savings. In 1984, American saved 10% in what they earned. Ten year later, it was down to 5% and today the savings rate is negative.

Americans now must do something they haven't done in recent years: live within their means. This is due to the high number of jobs being lost, rapidly falling housing prices, and financial institutions cutting off life support to easy credit. Since people are now being challenged to live within their means, many are also realizing that they need to increase what they save and put in the bank--something they haven't done for a long, long time. According to Chief Economist for Lehman Brothers, Ethan S. Harris, "The long collapse in the United States saving rate is over... People are going to start saving the old-fashioned way, rather then letting the stock market and rising home values do it for them."

Two realities have now merged into one: 1) The savings rate in the U.S. is now increasing instead of decreasing as it did the past 30-plus years. 2) Easy credit is quickly vanishing from the American landscape.

The problem is this, consumer spending is the main driver of our economy. With a society that will now be socking away more money into the bank and actually planning for the future and using far less credit; there will be less spending which is the primary component of economic growth.

In coming months, we will be in for a shock as the free-wheel spending and easy credit that allowed even Americans of modest means to occupy McMansions and drive expensive gas-guzzling SUVs comes to a crashing halt. Folks, the party is over.

http://www.nytimes.com/2008/02/05/bu...ef=todayspaper
I am not sure who told people it was a good idea to borrow on the equity of their homes for more STUFF and VACATIONS and paying down credit cards of things like gasoline and food. Just dumb!
__________________

__________________
newguy88 is offline   Reply With Quote
Old 02-05-2008, 10:10 PM   #43
Thinks s/he gets paid by the post
 
Join Date: Apr 2007
Posts: 1,304
Quote:
Originally Posted by Buku View Post
I have a 20 year realtionship with this bank and never been any kind of trouble...now I ask for something they have been sending me advertising stuff in the mail for years to try to get me to do. When I actually apply I get told no...

like I said, Im astounded, this messes with my world view. I had always thought with a good credit rating built over decades you got good treatment.

Not the case.
I found this to be the case about 28 years ago when I was trying to get my mortgage on my 1st house. I went to the S&L where I had been doing business since I was 6 years old (my 1st savings account). They basically told me to go pound sand. I withdrew all my savings that day.

An ironic post script; they went out of business a few years later.
hmmm maybe they shoulda taken better care of their customers.
__________________
Life is GREAT!
megacorp-firee is offline   Reply With Quote
Old 02-05-2008, 10:24 PM   #44
Thinks s/he gets paid by the post
 
Join Date: Apr 2007
Posts: 1,304
Quote:
Originally Posted by Buku View Post
I tried wells fargo. The problem with them is I only want 20k which is below some kind of minimum step in the loan amount. To get the loan id have to sign up for a pretty high interest rate and early repayment fees. ...no reason not to use credit cards.

yes LTV is the problem with my HE loan. Kind of funny though, not enough to be worth their time, but too much for the risk.

Ill say it again, they "have lost their minds"
It's a sh*tty situation, but when looking at it from their point of view and in light of the knee jerk reaction to the subprime fiasco, I am not surprised. After all it is a small (to them) amount. They will give you the loan, but at their 'price' and their 'terms'.
So they are basically telling you what you already know ... not enough to be worth their time.
It's not too much risk... they will take it on for the right price.
ROCK>you<HARD PLACE
Credit cards it is!
__________________
Life is GREAT!
megacorp-firee is offline   Reply With Quote
Old 02-05-2008, 10:28 PM   #45
Thinks s/he gets paid by the post
 
Join Date: Apr 2007
Posts: 1,304
Quote:
Originally Posted by FinanceDude View Post
I got a letter from Capital One today, with the headling:

"What have we done wrong, or (gasp) what HAVEN'T we done Right"

They want me to call them to get me in the "right card" ......

Obviously, they need money. Too bad I don't use credit cards...........
I am amazed that Credit Card companies give me any cards at all. I know that they make money on their charges to the vendors, but I don't think over the last 35+ years I have given them more than $5 in interest. I keep getting monthly offers for upwards of $100K line of credit.
Talk about Crazy.
__________________
Life is GREAT!
megacorp-firee is offline   Reply With Quote
Old 02-05-2008, 11:01 PM   #46
Recycles dryer sheets
barbarus's Avatar
 
Join Date: Aug 2007
Posts: 433
Quote:
Originally Posted by Retire Soon View Post
Consumer currently accounts for 70% of GNP, up from 63% in 1980. Much of this increase can be attributed to the easy credit that we've enjoyed over the past few decades in the form of credit card spending and people using their home equity as a checking account.

In just the last four years, 34,000,000 households have taken money out of their homes --which amounts to 1/3 of homeowners spending the precious equity they've accumulated. This means they're borrowing heavily "to finance their day-to-day lives.

It's now time to pay the piper as lending institution across the U.S. are tightening up on credit standard both in secured home loans and unsecured credit cards. Because of the evaporation of easy credit, consumers are now heading to Wal-Mart instead of Nordstroms. Conspicuous consumption is giving way to trying to making one's dollar go the furthest.

Credit counselors report that they are receiving desperate calls from not only people of modest means, but also people who earn six-figure incomes. These high wage earners are disillusioned as they don't know how to exist without easy credit. They've maxed out both their credit cards and mortgaged their home to the hilt, and they don't know what else to do now that they can no longer shop until they drop.

Extravagance in consumer spending has resulted in people placing less money in savings. In 1984, American saved 10% in what they earned. Ten year later, it was down to 5% and today the savings rate is negative.

Americans now must do something they haven't done in recent years: live within their means. This is due to the high number of jobs being lost, rapidly falling housing prices, and financial institutions cutting off life support to easy credit. Since people are now being challenged to live within their means, many are also realizing that they need to increase what they save and put in the bank--something they haven't done for a long, long time. According to Chief Economist for Lehman Brothers, Ethan S. Harris, "The long collapse in the United States saving rate is over... People are going to start saving the old-fashioned way, rather then letting the stock market and rising home values do it for them."

Two realities have now merged into one: 1) The savings rate in the U.S. is now increasing instead of decreasing as it did the past 30-plus years. 2) Easy credit is quickly vanishing from the American landscape.

The problem is this, consumer spending is the main driver of our economy. With a society that will now be socking away more money into the bank and actually planning for the future and using far less credit; there will be less spending which is the primary component of economic growth.

In coming months, we will be in for a shock as the free-wheel spending and easy credit that allowed even Americans of modest means to occupy McMansions and drive expensive gas-guzzling SUVs comes to a crashing halt. Folks, the party is over.

http://www.nytimes.com/2008/02/05/bu...ef=todayspaper

Thanks to the Fed, saving is now a suckers' game.
The old-fashioned way of saving was to actually make money in the form of interest on your saved funds. Now, the return is less than inflation. Government policy encourages profligate spending to keep the economic party going.
__________________
Consult with only myself as your adviser or representative. My thoughts should be construed as investment advice of the highest caliber. Past performance is but a pale shadow and guarantee of even greater results in the future.
barbarus is offline   Reply With Quote
Old 02-06-2008, 06:51 AM   #47
Recycles dryer sheets
 
Join Date: Jan 2008
Posts: 314
Quote:
Originally Posted by FinanceDude View Post
I think your collections career has made you permanently cynical........... Just kidding....... I agree the pendelum is swinging back slightly, but it seems to me the govt is still counting on Americans spending themselves into oblivion.

If instead of giving Joe Citizen the $150 billion, we could pay down the national debt by $150 billion.......
Well what I find cynical, is that the feds want us to spend the money to "stimulate the economy". Yet, how is borrowing another $150B from the national debt to pay for this going to help?
__________________
Primary title "chief moron"
myself is offline   Reply With Quote
Old 02-06-2008, 08:47 AM   #48
Moderator Emeritus
Bestwifeever's Avatar
 
Join Date: Sep 2007
Posts: 16,375
On the other hand, if OP's vendors accept credit cards for payments, he can put all the work on a credit card and earn miles/point AND have the credit card company's protection if there's a problem with the work not getting done, I think. So that might be for the best even without the tax advantage of using home equity.
__________________
Bestwifeever is offline   Reply With Quote
Old 02-06-2008, 09:37 AM   #49
Moderator Emeritus
Khan's Avatar
 
Join Date: Aug 2006
Location: Pine Island, Florida
Posts: 6,868
Send a message via AIM to Khan
Quote:
Originally Posted by newguy888 View Post
I am not sure who told people it was a good idea to borrow on the equity of their homes for more STUFF and VACATIONS and paying down credit cards of things like gasoline and food. Just dumb!
I recall various commercials suggesting that it was stupid to leave all that equity hanging around doing nothing.
__________________

__________________
"Knowin' no one nowhere's gonna miss us when we're gone..."
Khan is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Human Face of the Mortgage Mess haha FIRE and Money 29 12-22-2007 08:30 AM
Partial face transplants REWahoo Other topics 8 07-31-2007 03:33 PM
Muslims face extra checks in new travel crackdown Craig Other topics 33 08-20-2006 09:35 AM
Best way to shoot a telemarketer in the face? cute fuzzy bunny Other topics 30 07-23-2006 02:40 PM
Consumers face challenges in handling debt cute fuzzy bunny FIRE and Money 6 07-04-2006 06:24 PM

 

 
All times are GMT -6. The time now is 03:31 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.