don't own your own home! ???

texican · #41 01/04/06, 07:24 PM

When a stranger or new acquaintance first visits my home, I tell them to be careful walking down my stone stairs... and inform them of my insurance coverage and the 'payment schedules'... My coverage is with Hesston F.E.L., Inc. They usually say they haven't heard of that company. I point to the Hesston tractor, with the Front End Loader...and that if someone gets a hangnail or worse, and wants to sue, I dig a hole with the FEL, and usually let them "fill in the blanks", so to speak.

At that point, they grab a hold of the handrails just a little tighter...

If someone wants to sue me, they'd best live in another country...

Shepherd · #42 01/04/06, 08:16 PM

Quote:

Originally Posted by texican

I point to the Hesston tractor, with the Front End Loader...and that if someone gets a hangnail or worse, and wants to sue, I dig a hole with the FEL, and usually let them "fill in the blanks", so to speak.

At that point, they grab a hold of the handrails just a little tighter...

If someone wants to sue me, they'd best live in another country...

ROFL Texican! I've used that threat a few times myself. Gotta love having a lot of land and living in the woods!

heather · #43 01/04/06, 09:55 PM

Quote:

Originally Posted by gilberte

Radio financial guru Bruce Williams was always an advocate of carrying a mortgage on any equity in a home. His reasoning was why not pay 6-8% interest on a mortgage when you can make 10% interest in investing that money. The stock market was doing well at the time, don't know if he is still touting that advice or not as I haven't listened to him in a while.

Me, I just feel better having a home that's all paid for (except for the rent I pay to the town in taxes).

This is exactly right - depending on your portfolio, you could be beating the bank, so to speak -
If your mortage is 5.75 right now & you're getting a 9.34 return on your investments, you're not doing too badly -
It all depends on your portfolio -

That being said, I'd rather have my house paid off

texican · #44 01/04/06, 10:35 PM

Quote:

Originally Posted by heather

If your mortage is 5.75 right now & you're getting a 9.34 return on your investments, you're not doing too badly -
It all depends on your portfolio -

That being said, I'd rather have my house paid off

I'd rather make 9.34 than 9.34 - 5.75 = 3.59 ....... at least 9 beats 3 in my book, most days of the week.

in a typical 30yr mortgage, you pay twice as much interest as the principal, so a 100K house costs 300K...

...'sides, I've never had a mortgage, and don't plan on getting one. Started yesterday on my new home, and haven't in my wildest dreams contemplated talking to my banker.

donsgal · #45 01/04/06, 10:42 PM

Quote:

Originally Posted by Paul Wheaton

So I met this woman that is a successful real estate person. She sounds really savvy in all sorts of finance stuff. Way over my head.

She tells me something I've never heard before that is kinda spooky. She says that people should always carry a big mortgage on their home. Otherwise, somebody will sue you and take it all. If you have a big mortgage, you don't own anything worth suing you for - so the jerks leave you alone.

She seems to know of lots of folks where this has happened. And she herself keeps a mortgage.

Does this sound like truth to anybody else?

There are much smarter ways to protect your assets than paying hundreds of thousands of dollars in interest over a long period of time. That is just plain stupid.

Both of my properties (my current house and my future homestead) are paid off. I worked hard to put as much money as possible to get them paid off quickly so that I would be very close to debt free (not close enough yet LOL).

Property can be put in trust, sheltered in a corporation, and manipulated in a hundred different ways to protect it from potential judgments. You can go to any CPA or financial attorney and find out what options are available.

Paying 1000 a month or more as "insurance" against a law suit is stupid at best. Methinks that there is a real estate agent who is trying to justify her own existance, or doesn't know any better.

donsgal

Alex · #46 01/05/06, 12:01 AM

donsgal,

Exactly! That's it. Well said.

Thanks,

Alex

midkiffsjoy · #47 01/05/06, 12:09 AM

Quote:

Originally Posted by Red Devil

...slight deviation... but relevant.

When I knew I was moving to the N.Central WI area, we applied for a home loan. We were pre-approved for a certain amount. With that ammo, we went house-hunting. Each place we viewed had at least five acres and the largest had 120.We ranked the houses and land for amenities, location, lay, outbuildings, etc. and chose the one we wanted. It was 40 acres with a farmhouse and a run down outbuilding or two, but the lay of the land was PERFECT (almost all slight south slope with an incredible view).

We went back to the mortage company and got approved for the loan through a bank in IL. For those who know the Chicagoland area, our mortgage company was Barrington Mortgage (one of the larger - and I'm embarrassed to say - hoity toitier) but we had a friend who worked there.

This bank got the deed, appraisal, title info, and all reports from the sale and approved us. I got in the car to drive north and go to the bank, and 2 horus into a four hour drive, my wife called crying... the bank had now turned us down. WHY? Because they - weeks later - just now noticed that there were more than x acres and this qualified as a "farm" which means the bank cannot second the paper to the Federal Government (the real issue) thus they won't approve the loan.

I called the mortgage company and they went ballistic. The bank had already given them written approval, and they wanted to go to court. They called the bank and the bank refused to honor their agreement. Long story short, the bank (after a few days) pulled the septic report and used one of the comments on it to get out of the original agreement, thus avoiding a lawsuit. Barrington Mortgage however dropped that bank as a client, which hurt them FAR more than my lawsuit could have.

So, in the remaining two hours, my wife - god bless her - called and called... finally finding a local bank who was willing to carry the paper themselves and put the owner's money in escrow on the septic... thus creating a kosher deal. With 10 min left in my drive, I knew where I was going to meet the sellers. Talk about STRESS!!! (Thank you God and my wonderful wife).

The bank carried our paper until the septic was complete, and then we refinanced the entire deal at 4.3 % FIXED!!!

Now, ask me if I like banks? I hate them and the very concept of them... but this local bank gets my business until I draw my last breath, and everyone's business that I can tell.

R

WOW!!!! CONGRADULATIONS, That's AWESOME!!!! (in the Bill Engvall sence on the word even!!!)

pyper7 · #48 01/05/06, 06:06 AM

interesting reading. Hubby and I were just wondering if we should borrow against the equity in our home to purchase a fixer upper in the area. We are skilled in many trades between the two of us and were considering fixing and selling a home in the area. Now, I'm not so sure it's a good idea after reading this thread. The idea was to take any profits to help pay off our mortgage, but truthfully, we are so very conservative with our money I don't know if I'd be sleeping nights until it was over. We are old school thinkers, staying as low in debt as possible and doing as much for ouselves as we can or doing without. We do have considerable equity but real estate in this area has exploded in the past 10 years and I'm wondering if this is a trend or just the way it is going to stay. Any advice is welcomed!
Carolyn

**Terri** · #49 01/05/06, 01:41 PM

I intend to retire, one day, and my income will drop.

I intend to have the necessities of life when I am old, and that is why I intend to pay off my home. Retirement income - rent can be grim. Retirement + a paid for house looks MUCH! better!

speedfunk · #50 01/05/06, 02:08 PM

A bit off topic : But I think that a few people including my self are intrested in how a trust is setup and why it protects you ( not familair ) I would perfer when we finish our payments to not have any insurance on our house. ( made from pure cinder block..not worried about it buring ....on a hill not worried about flodding ..etc)

Jefff

Aintlifegrand · #51 01/05/06, 02:10 PM

Quote:

Originally Posted by Alex

I am an engineer. People love to sue engineers: though I have not been sued in 28 years.

Our house is a in a Family Trust. So we DO NOT own it, the Family Trust owns it.

So, pay off your house, but have it in a TRUST if you are worried about being sued. It's not too expensive to have lawyers and accountants set up.

Good Luck,

Alex

What exactly is a Family Trust...I guess I mean how does it work?

Coloradosteader · #52 01/05/06, 04:20 PM

Mine is bought and paid for, I'm currently building by hand and the property is in the name of a New Mexico LLC. Try and get it!

Coloradosteader

Alex · #53 01/05/06, 04:23 PM

You create an identity called a 'Trust' [I call our house trust 'House Trust' (not Family Trust as I wrote above)]. We do have a 'Family Trust' too, which owns other things.

You do this as required by the State or Provincial rules where you live.

You basically need 'Settlers' (usually mother or father or close friend) who start the trust. You are the 'Trustee(s)' and some of the 'Beneficiaries' of the Trust. The Trustees get to decide what to do with the assets of the Trust. Anyone can put items into the Trust.

Remember I am neither an accountant nor attorney.

And, these rules are different in different areas, so you MUST set everything up just right according to where you are.

The main idea is you wind up owning NOTHING. In the words of Janis Joplin, "Freedom is just another word for, nothing-left-to-lose."

Talk to professional if you are interested in trusts.

Good Luck,

Alex

Quint · #54 01/05/06, 09:45 PM

Woman is a loon in my opinion. I own my new house and 164 acre homestead free and clear at the age of 33 and owned to free and clear several years before that. Is it a McMansion? No. It is a nice, modest 3 bedroom 2 bath home. My vehicles are 15 years old. I don't owe money to anyone. She can have her mortgage and the supposed sue proofing it provides. I'll pay the few hundred bucks a year I pay for 2 million dollars in liability coverage. My attorneys have assured me (at considerable expense) that with the liability insurance and their legal gymnastics I'm well protected against some getting their grubby hands on my assets.

The truly sad part is that we don't own our property. Oh we can pretend we do but it is really only an illusion. We only rent it. I just got done paying my government rent check. My rent check to the government known as property taxes. It is in fact rent. You either pay it or the government will come and evict you and confiscate your land. One of the most EVIL concepts ever devised by those in power. What I wouldn't give to eliminate the property tax. Not only that but I live in a state where they not only tax your house and land but your actual possessions. Your personal property. How utterly evil. They tax everything from cattle to cars to tractors to tools to airplanes. Oh what I wouldn't give for a fair tax which taxes consumption not income or property. Sales and excise taxes and not property and income taxes.

solidwoods · #55 01/06/06, 07:30 AM

Move out of that area.
Listen too the warnings the Realtor is telling you.

also its BS.

You can be sued for anything and everything.
Lawsuits can go either way.
Identical suits can have opposite outcomes.

yea,, this is OUR legal system.

and yes you can get away with crime, legally, right within the law.
I've seen it with my own eyes.

Conflicting laws are sign that we have to many laws.
(tell a friend to tell a friend)
jim

Mid Tn Mama · #56 01/06/06, 02:13 PM

Alex: Who is your trustee? And how do you feel about giving them the power of decisionmaking on that trust?

Alex · #57 01/06/06, 04:03 PM

Nancy and I are 'Trustees'. Nancy and I, and our two adult children are 'Beneficiaries'.

Nancy and I are the only ones to make decisions.

Please talk to professionals about this if serious (you will have to anyway). Trusts are not guaranteed protection, unless used for the correct reasons, at the correct time, so as said before, set them up properly.

And they aren’t for everyone.

Good Luck,

Alex

Alice · #58 01/07/06, 10:49 AM

After having lost everything due to work related injuries and the employer didn't carry work comp insurance and filed bankruptcy, I WILL NEVER put myself in the position of losing everything again. If I can't own it completely I won't own it.

I think people who carry big mortgages, relying on their current careers to make the payments is foolish. Anything can go wrong. I never expected it to happen to me. Had the world by the tail so to speak. Good paying job with a major corporation and plenty of work. Too bad I found out after the injury that the corporation was very heavily involved in shady business.

They have been in a reorganizational bankruptcy now for 3+ years and still have paid a dime to any of their creditors while still managing to conduct business as usual. Really ticks me off.

They are still making money, while I can't work and am struggling to get back on my feet. Unfortunately, I am not the only injured employee they did this too. There are thousands of us. Yes that's right, thousands! And there isn't a thing we can do about it legally. They are protected under the bankruptcy laws.

Hard lesson learned for me. When I own again there will be no mortgage and I will not put all my eggs in one basket working for someone else who may or may not be trustworthy. My injuries won't let me go back to the work I did before anyway so I am starting my own craft business.

It's been a very long 5+ years but I am finally starting to climb out of the hole that company put me in. It took no time at all to deplete savings accounts and any other tangible assets. I even got to the point of having yard sales just to try to make enough money to buy food. Lived in a tent for a while then froze my butt off in a camper over winter in central Illinois.

Don't bring up public aid. Another sore spot with me and would make for a very long and angry post, LOL. Yes, I applied, and yes I was turned down. Why? This is what I was told by the office manager, "You are white, with no kids, you don't qualify, go get pregnant and then we can help you". People, I am in my 40s, homeless, (living with a friend right now, but living in a tent at the time I was told this) do I really want to be foolish enough to bring a child into that situation??? Please understand about the comment of being white. I am not a prejudice person, that is what the office manager at public aid told me. I wanted to knock him on his royal keester, LOL.

Anyhow, sorry about the very long post but I wanted to get the point across that there are very many things to take into consideration before taking on a big mortgage. You may think your job is secure,, and it might very well be as long as you stay healthy and don't get hurt. But what if????

Alice[SIZE=2][COLOR=Red]