Protestantism

» Migisi - the Diff

In response to the Diff posted by redback:
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People today on 7.25% have no insight into "the old days" where the mortgage interest was say 14% to 15%. Houses WERE cheaper but wages were also much lower.
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I remember those 'old days'. 7.25% is (ehem) 'cheap' in comparison.
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But today's loans are like right out of a game of monopoly. $AUD400,000 only buys a basic house in my working class suburb.
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$1 AUD = $0.8829 US, so our dollar would buy less in OZ. But, close enough. As of today, the median price for a home in, say, California, is $402,000 (down nearly 15% from last year's price of $472,000). The median price in Chicago and suburbs is $269,900. The median in New York is $439,000. Of course, if one buys pre-existing housing in rural areas, it can be cheaper. But there are few good paying jobs in rural towns, so one must drive further to work. The cost for petrol can impact any real savings.
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Fixed interest is obviously best now but many existing borrowers, strugglers on variable rates...need to pay a fee - $1000 - or so to swap. Our Treasurer-in-Training is trying to make the swapping processing more flexible and free.
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Yep, those loan closings fees. Those could be prohibitive if one is already broke. I'm always leary of anything with a 'free' hook, since there's no such thing as 'free lunch'. There's always a catch to it. One just needs to look for it.
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This early payment penalty. We can't avoid it here...but read the fine print. Mine was based on a % of the final payout.
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We can avoid it here by not signing it, or lining it out. If it's a "make or break the deal" thing, I'd sooner break it. I insist that I be given the time to review all paperwork - by myself - before signing anything. The brokers and agents can go do lunch or whatever. I simply don't care if they're inconvenienced. I'm not an easy client - but I'm a good one.
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So, I paid all bar $100 before seeking the payout figure and before seeking the appointment they want. In any event, paying fortnightly and above the minimum payment way easily offsets the early fee...but not as you say in the first year or two.
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If one can pay more than the minimum, that's a terrific idea. But most who are in a financial crunch can't even pay their minimum. That's usually why they're trying to renegotiate their loan. And the loan sharks know that these people will agree to anything to get some relief. If they're not careful, they'll be in a worse financial state than before.
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Tis the finances...not the emotional costs re renting. Your sister is up for removal costs etc that need to be factored in. Note I did not say it ALWAYS is cheaper.
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It's going to be extremely difficult for her to find another affordable apartment that fits her needs. She's physically handicapped and on government assistance - which seriously limits her choices, if any.
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All I can say after 30 years of mortgage - a time with 2 mortgages - tis a great relief to be free.
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That's my goal! I'm working hard on it.
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Otherwise, I'd still need to be at work. And I do try to sell 'discipline', 'budgeting' and other life skills to our clan's emerging generation.
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My husband still 'sorta' works at age 65. I say 'sorta' because -- he's a realtor. Business hasn't been good for a year+. He likes to work, and I'm glad he's out of the house a few hours every day. It's good for both of us. Our frugal lifestyle allowed us to put away some savings for our 'rainy day'. I've tried to sell those life skills to my kids. Alas, the thrill of spending and possessing 'things' overrides my 'old fashioned' advice. Guess they'll have to learn the hard way. and big sigh.

-- posted by Migisi