4 ms·

Startup tip to save $15,000 a year: Just stop paying your mortgage

31 points by vlad 18y ago

deleted 18y ago
[deleted]
lpgauth 18y ago
Not sure this is such a great idea...
- helveticaman 18y ago
  While I agree, I can't say for sure it isn't.
  - akd 18y ago
    You have to make sure that you're not defaulting on anything in your capacity as a startup, i.e. office space.
wayne 18y ago
As the article states, only applicable if you have no equity in your house and you have no other assets. Hopefully no one here was silly enough to buy a house under those circumstances.
- ConradHex 18y ago
  While it looks silly now to buy a house with no equity (nothing down), it didn't seem so silly a few years ago. If you bought during the boom there was a good chance you would have a lot of equity in a couple years...
jraines 18y ago
Tomorrow in the San Diego Union Tribune: How to get a credit card in someone else's name.
johnrob 18y ago
Apparently the heavy sarcasm in this article is not evident to everyone.
- vlad 18y ago
  That's not an accurate representation of the author's opinion. If you've ever seen Peter Schiff on television, he actually talks like this in real life. In 2006 or earlier, he predicted that a progressive collapse of the housing market would happen, causing houses to lose 90% of their value over the next ten years, as well credit crunches, defaults, foreclosures, banks not trusting each other, and more. He was laughed at at the time, but he's been right, and now the media treats him more seriously in interviews than they did before, when they thought he was just trying to be different than everyone else for attention. From watching some interviews on YouTube, he also believes we never recovered from the dot com crash, and the easy financing and securities that helped increase the dow jones industrial average just masked the recession following 2001 and slowed down the recovery and rebalancing process. He thinks a bailout again slows down and only delays the obviousness of a recession and the recovery process. It is conceivable, then, that in this article he's relatively serious that people should start considering why there is a need for a bailout (just because the bill was passed in haste doesn't mean that there's no more time to talk about it) and that if the government passes such breaks, why should one not take advantage of them, if that's what it takes to make the government consider the repercussions of the bailout, and saves the person money? As he says, politicians don't think about things realistically but just pleasing the voter and appearing quick and decisive. He also says that money did not disappear into thin air, but went to the homeowners who sold their home for a large price to those who are "stuck" with them now. He also says that people who bought the houses often did it because they could actually save money by living in a house over paying rental. This is proven by the fact that a lot of borrowers who have been defaulting never intended to live in that house for more than two or three years. They did not have to put down a deposit. They wanted to have a house for a cheaper price than it was to rent (with the introductory rates for the first few years often being low). And if the house was now worth more than they paid for it, even better! They could then sell it after those three years. According to Peter, a lot of people who bought houses they could not afford and that are going into foreclosure now, were not dumb at all, but very smart. According to Peter, as a person who needs to live somewhere, you needed a good credit history, three references, a job, and a good income to rent an apartment, all of which was verified, but you could get a no-money down, low-interest rate mortgage without any verification of your credentials at all, and often for less than what it cost to rent, and you could potentially rent out a part of the house to bring the cost down even further, and on top of that, either sell it for $30,000 profit three years later or just walk away from it, having paid what it cost you to rent. The second option is what "will" end up happening (he said this in 2006), and having correctly predicted this, he cannot believe the idea of bailouts for anybody. It is the banks who took on the risks and should therefore have to live with it. The lenders invented loans that did not require the verification of income or credit history. According to Peter, this is not the government's problem or the people's problem. This may have sounded satirical or sarcastic to the editor who published this article, but I believe Peter did not intend for it to be so.
iheartrms 18y ago
Stop paying my mortgage? Uh...you first. And only $15k/year? This guy doesn't have my mortgage! Try $27600/year!
- josefresco 18y ago
  Agreed, I could pay a $15K/year mortgage in my sleep.
  - MicahWedemeyer 18y ago
    You can start with mine :)
- arockwell 18y ago
  I would guess $15k/year is around what you would pay for a mortage on a $200k, which is about the median price of a house in the US. Also, that's before taxes and insurance.
  - vlad 18y ago
    Actually, I made that number up. :) I roughly multiplied 1,200 x 12 in my head and rounded up. My point was to make it just high enough to be an entrepreneur's greatest savings per month, above a car payment, utilities, insurance, etc, to get the point across. It also sounded about right.
    - arockwell 18y ago
      Hah, I'm really good at overanalyzing.
Dilpil 18y ago
I would imagine that since your mortgage is secured debt, if you defaulted on it, while they might not be able to take your house, they could take some of your other assets. Namely, your start up.
- ConradHex 18y ago
  It depends on where you live, among other things. In some states creditors can garnish your wages. Other places they can't, but they can come after your bank accounts. I'm not sure about coming after your startup. It seems unlikely to me, but I'm the wrong guy to ask.
quasimojo 18y ago
realistically though, if you don't care about your credit rating and if you are in a house you can't afford, just make payments when you get a delinquincy notice. you can likely get two more years out of living in the dwelling....banks are so swamped with foreclosures that making a token payment will bump you back in the queue and buy you some more time

31 points by vlad 18y ago

deleted 18y ago

[deleted]

lpgauth 18y ago

Not sure this is such a great idea...

helveticaman 18y ago
While I agree, I can't say for sure it isn't.
- akd 18y ago
  You have to make sure that you're not defaulting on anything in your capacity as a startup, i.e. office space.

wayne 18y ago

As the article states, only applicable if you have no equity in your house and you have no other assets. Hopefully no one here was silly enough to buy a house under those circumstances.

ConradHex 18y ago
While it looks silly now to buy a house with no equity (nothing down), it didn't seem so silly a few years ago. If you bought during the boom there was a good chance you would have a lot of equity in a couple years...

jraines 18y ago

Tomorrow in the San Diego Union Tribune: How to get a credit card in someone else's name.

johnrob 18y ago

Apparently the heavy sarcasm in this article is not evident to everyone.

vlad 18y ago
That's not an accurate representation of the author's opinion. If you've ever seen Peter Schiff on television, he actually talks like this in real life. In 2006 or earlier, he predicted that a progressive collapse of the housing market would happen, causing houses to lose 90% of their value over the next ten years, as well credit crunches, defaults, foreclosures, banks not trusting each other, and more. He was laughed at at the time, but he's been right, and now the media treats him more seriously in interviews than they did before, when they thought he was just trying to be different than everyone else for attention. From watching some interviews on YouTube, he also believes we never recovered from the dot com crash, and the easy financing and securities that helped increase the dow jones industrial average just masked the recession following 2001 and slowed down the recovery and rebalancing process. He thinks a bailout again slows down and only delays the obviousness of a recession and the recovery process. It is conceivable, then, that in this article he's relatively serious that people should start considering why there is a need for a bailout (just because the bill was passed in haste doesn't mean that there's no more time to talk about it) and that if the government passes such breaks, why should one not take advantage of them, if that's what it takes to make the government consider the repercussions of the bailout, and saves the person money? As he says, politicians don't think about things realistically but just pleasing the voter and appearing quick and decisive. He also says that money did not disappear into thin air, but went to the homeowners who sold their home for a large price to those who are "stuck" with them now. He also says that people who bought the houses often did it because they could actually save money by living in a house over paying rental. This is proven by the fact that a lot of borrowers who have been defaulting never intended to live in that house for more than two or three years. They did not have to put down a deposit. They wanted to have a house for a cheaper price than it was to rent (with the introductory rates for the first few years often being low). And if the house was now worth more than they paid for it, even better! They could then sell it after those three years. According to Peter, a lot of people who bought houses they could not afford and that are going into foreclosure now, were not dumb at all, but very smart. According to Peter, as a person who needs to live somewhere, you needed a good credit history, three references, a job, and a good income to rent an apartment, all of which was verified, but you could get a no-money down, low-interest rate mortgage without any verification of your credentials at all, and often for less than what it cost to rent, and you could potentially rent out a part of the house to bring the cost down even further, and on top of that, either sell it for $30,000 profit three years later or just walk away from it, having paid what it cost you to rent. The second option is what "will" end up happening (he said this in 2006), and having correctly predicted this, he cannot believe the idea of bailouts for anybody. It is the banks who took on the risks and should therefore have to live with it. The lenders invented loans that did not require the verification of income or credit history. According to Peter, this is not the government's problem or the people's problem. This may have sounded satirical or sarcastic to the editor who published this article, but I believe Peter did not intend for it to be so.

iheartrms 18y ago

Stop paying my mortgage? Uh...you first. And only $15k/year? This guy doesn't have my mortgage! Try $27600/year!

josefresco 18y ago
Agreed, I could pay a $15K/year mortgage in my sleep.
- MicahWedemeyer 18y ago
  You can start with mine :)
arockwell 18y ago
I would guess $15k/year is around what you would pay for a mortage on a $200k, which is about the median price of a house in the US. Also, that's before taxes and insurance.
- vlad 18y ago
  Actually, I made that number up. :) I roughly multiplied 1,200 x 12 in my head and rounded up. My point was to make it just high enough to be an entrepreneur's greatest savings per month, above a car payment, utilities, insurance, etc, to get the point across. It also sounded about right.
  - arockwell 18y ago
    Hah, I'm really good at overanalyzing.

Dilpil 18y ago

I would imagine that since your mortgage is secured debt, if you defaulted on it, while they might not be able to take your house, they could take some of your other assets. Namely, your start up.

ConradHex 18y ago
It depends on where you live, among other things. In some states creditors can garnish your wages. Other places they can't, but they can come after your bank accounts. I'm not sure about coming after your startup. It seems unlikely to me, but I'm the wrong guy to ask.

quasimojo 18y ago

realistically though, if you don't care about your credit rating and if you are in a house you can't afford, just make payments when you get a delinquincy notice. you can likely get two more years out of living in the dwelling....banks are so swamped with foreclosures that making a token payment will bump you back in the queue and buy you some more time