If Dallas-area homeowners thought Allstate was hiking their rates, they haven’t seen anything yet.
State Farm must be trying to buy a farm or two with a 14 percent rate hike, once again leaving Texas residents at the mercy of the near-toothless state Department of Insurance.
Showing posts with label home ownership. Show all posts
Showing posts with label home ownership. Show all posts
July 15, 2009
December 14, 2008
Obama HUD choice reflects homeownership myths
First and foremost, contrary to President-elect Barack Obama and his Housing and Urban Development Secretary-designee Shaun Donovan, not everybody in America should own a home.
Unfortunately, people within the lower middle class who can't manage their finances become the targets of predatory home lenders, while those in the rich with the same lack of financial acumen get bailed out by parents, trust funds or the government.
Well, with the rich, we need to stop bailout option No. 3 and tighten tax loopholes against option No. 2. With the less well-off, we need to drop the myths of home ownership.
After all, those myths have been foisted upon us by the National Association of Realtors.
The truth is that if you invest -- even cautiously -- the money you save by renting, you'll come out even. And, if you invest cautiously, you'll have less stress.
Beyond that, renting is more environmentally friendly.
More environmentally friendly yet would be to eliminate the tax deduction for home mortgage interest payments. That would stop McMansion building right in its tracks.
"He understands that we need to move past the stale arguments that say low-income Americans shouldn't even try to own a home or that our mortgage crisis is due solely to a few greedy lenders," Obama said of Donovan.
"He knows that we can put the dream of owning a home within reach for more families, so long as we're making loans in the right way, and so long as those who buy a home are prepared for the responsibilities of homeownership."
Unfortunately, people within the lower middle class who can't manage their finances become the targets of predatory home lenders, while those in the rich with the same lack of financial acumen get bailed out by parents, trust funds or the government.
Well, with the rich, we need to stop bailout option No. 3 and tighten tax loopholes against option No. 2. With the less well-off, we need to drop the myths of home ownership.
After all, those myths have been foisted upon us by the National Association of Realtors.
The truth is that if you invest -- even cautiously -- the money you save by renting, you'll come out even. And, if you invest cautiously, you'll have less stress.
Beyond that, renting is more environmentally friendly.
More environmentally friendly yet would be to eliminate the tax deduction for home mortgage interest payments. That would stop McMansion building right in its tracks.
July 26, 2008
Ban the word ‘equity’
With the direness of foreclosure projections being revised to the worse, I think it’s time to officially and legally ban the word “equity” from real estate agents, realtors, mortgage brokers, etc. in any part of a home sales pitch.
Picture going to your Toyota, GM, Honda or Ford dealer. If the salesperson, after complimenting you on your eye for vehicles, said, “And you’re building up equity when you buy that,” you’d laugh in his or her face.
But people go along with the same schmuckery all the time when buying a home.
No, you’re not buying equity at all.
Given that today’s cookie-cutter suburban tract homes have a planned obsolescence that basically comes due about the day the warranty expires, you’re actually buying yourself long-term repair bills at the 30-year mark.
Given that everybody else in the same neighborhood probably believes that equity crapola, too, you’re buying midterm remodeling bills at the 10-15 year mark.
Oh, and if your repairs are good enough to raise the price of your home, you’ re buying yourself a higher tax bill, too.
You’re not buying “equity,” though.
Buy a home as a residence, not an investment. Buy something MUCH more affordable, and invest in an actual investment. Maybe something safe, like CDs or slightly more “open,” like a market-based CD.
In most parts of the country, at the 30-year mark, you’ll actually have more money this way than if you bought a fancy new home for “equity.”
I’m serious on the banning. If I were the president, the Platonic philosopher-king or the head of the Federal Trade Commission, I would ban the word “equity” as false advertising.
Picture going to your Toyota, GM, Honda or Ford dealer. If the salesperson, after complimenting you on your eye for vehicles, said, “And you’re building up equity when you buy that,” you’d laugh in his or her face.
But people go along with the same schmuckery all the time when buying a home.
No, you’re not buying equity at all.
Given that today’s cookie-cutter suburban tract homes have a planned obsolescence that basically comes due about the day the warranty expires, you’re actually buying yourself long-term repair bills at the 30-year mark.
Given that everybody else in the same neighborhood probably believes that equity crapola, too, you’re buying midterm remodeling bills at the 10-15 year mark.
Oh, and if your repairs are good enough to raise the price of your home, you’ re buying yourself a higher tax bill, too.
You’re not buying “equity,” though.
Buy a home as a residence, not an investment. Buy something MUCH more affordable, and invest in an actual investment. Maybe something safe, like CDs or slightly more “open,” like a market-based CD.
In most parts of the country, at the 30-year mark, you’ll actually have more money this way than if you bought a fancy new home for “equity.”
I’m serious on the banning. If I were the president, the Platonic philosopher-king or the head of the Federal Trade Commission, I would ban the word “equity” as false advertising.
March 25, 2008
Blow through Realtor smoke-blowing on homebuying
If a new car salesman tried to sell you a high-dollar vehicle with the closer line, “And, you’ve got equity,” you’d laugh in his effing face.
Well, why don’t you do the same when a Realtor tells you that as part of trying to sell you a new house?
You should. Read the five myths about renting, with their realities:
• Renting is just throwing money away.
Not if you invest the money you’re saving by not buying.
• There are tax benefits to owning.
Only if you make enough money that your mortgage interest deduction (remember, it’s just interest that counts), plus other itemizable deductions, is more than your standard deduction would be if you didn’t itemize.
• It doesn’t cost any more to buy.
Wrong. You have property taxes every year. You have maintenance. You have an average of 11 percent in commissions and closing costs. You have insurance payments.
• Buyers have assets, renters don’t.
Well, yes, depreciating assets. And, the mythical equity of homeowners disappears after 10 years in, or so. Many homeowners then (going beyond the linked story), try to chase sunken costs and build up equity with remodeling projects.
• Houses are a good investment.
Not. Read the point immediately above.
Here’s the reality on that last point:
This blog post brought to you courtesy of the National Association of Realtors, Alan Greenspan, the Federal Reserve, and various other liars and idiots.
Well, why don’t you do the same when a Realtor tells you that as part of trying to sell you a new house?
You should. Read the five myths about renting, with their realities:
• Renting is just throwing money away.
Not if you invest the money you’re saving by not buying.
• There are tax benefits to owning.
Only if you make enough money that your mortgage interest deduction (remember, it’s just interest that counts), plus other itemizable deductions, is more than your standard deduction would be if you didn’t itemize.
• It doesn’t cost any more to buy.
Wrong. You have property taxes every year. You have maintenance. You have an average of 11 percent in commissions and closing costs. You have insurance payments.
• Buyers have assets, renters don’t.
Well, yes, depreciating assets. And, the mythical equity of homeowners disappears after 10 years in, or so. Many homeowners then (going beyond the linked story), try to chase sunken costs and build up equity with remodeling projects.
• Houses are a good investment.
Not. Read the point immediately above.
Here’s the reality on that last point:
The reality is that housing is not an investment. It’s shelter. That is all housing has ever been. Self-serving organizations like the National Association of Realtors like to tell people that buying a home is a good way to build long-term wealth, but this statement couldn't be further from the truth.
Although home prices can go up (and down), the rate of appreciation on housing does not surpass inflation levels over the long-term. Between 1890 and 2004, the real return on housing was a pathetic 0.4 percent per year over the last 100 years, according to Robert Shiller, a housing expert and Yale economist.
This blog post brought to you courtesy of the National Association of Realtors, Alan Greenspan, the Federal Reserve, and various other liars and idiots.
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