Doing a car refinance
09-07-2010, 10:44 PM
#41
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By this logic, one should never purchase on home on credit. What if the value goes down (millions of homes are underwater currently), what if you lose your job, what if you need a new roof? A house is a bigger expense than any auto will be. Millions of people have lost their homes because they couldn't afford their payment anymore. If they paid cash, it wouldn't matter.
Conversely, houses have lost value in this market, but you are planning to keep that house for 20-30 years - it is a hedging strategy. Cars only last 7-10 years, generally.
And to support the original statement, I agree in that I believe you should pay off your home as soon as possible. Yes, I know the arguments about returns on money being higher in the stock market, bonds, etc., but as you can see, the stock market is not much shelter in this economy. The people who are risk-free in their homes, own their homes outright.
Finally, House == generally appreciable asset over the long term. Car == absolutely depreciating asset, and has no long term value.
They are different things, but the principle still applies, generally. You buy a home because it builds equity and value in time, thus it is the only acceptable "good" debt. Cars are nothing of the sort.
09-08-2010, 06:18 AM
#42
At least that's how I see it.
In part, YES. You must be able to afford home maintenance, or you have no business owning one. Rent an apartment - the landlord is responsible for the structure until you are financially stable enough to afford property. If you are talking about buying a house entirely on credit that you can't afford to buffer or have generous cash for payments, then YES, you should not buy a home either.
Conversely, houses have lost value in this market, but you are planning to keep that house for 20-30 years - it is a hedging strategy. Cars only last 7-10 years, generally.
And to support the original statement, I agree in that I believe you should pay off your home as soon as possible. Yes, I know the arguments about returns on money being higher in the stock market, bonds, etc., but as you can see, the stock market is not much shelter in this economy. The people who are risk-free in their homes, own their homes outright.
Finally, House == generally appreciable asset over the long term. Car == absolutely depreciating asset, and has no long term value.
They are different things, but the principle still applies, generally. You buy a home because it builds equity and value in time, thus it is the only acceptable "good" debt. Cars are nothing of the sort.
Conversely, houses have lost value in this market, but you are planning to keep that house for 20-30 years - it is a hedging strategy. Cars only last 7-10 years, generally.
And to support the original statement, I agree in that I believe you should pay off your home as soon as possible. Yes, I know the arguments about returns on money being higher in the stock market, bonds, etc., but as you can see, the stock market is not much shelter in this economy. The people who are risk-free in their homes, own their homes outright.
Finally, House == generally appreciable asset over the long term. Car == absolutely depreciating asset, and has no long term value.
They are different things, but the principle still applies, generally. You buy a home because it builds equity and value in time, thus it is the only acceptable "good" debt. Cars are nothing of the sort.
Last edited by FineWine; 09-08-2010 at 06:26 AM.
09-08-2010, 11:15 PM
#43
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Sure on most of that, I won't beat the thread to death - only to say that if you have a HELOC, you probably already have a primary mortage, so your house is already subject to a bank foreclosure in those circumstances. If you had no house payment, you probably won't need the HELOC, and just buy outright. 
Nuff said.
Nuff said.
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