User Comments

1. 

   5/25/08

   daniel23

   I'm no good at maths. I'm betting my all on revolution.

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2. 

   5/25/08

   jackpayne

   I like, "ranting to the wind." Excellent wordsmithery.

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   1. 

      5/25/08

      oims

      LOLOLOL! Thanks Jack!
3. 

   5/25/08

   daniel23

   Well in my book property rights are based on the criteria of labour and use. So rent is generally usurious.

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   1. 

      5/25/08

      Donlewis

      Which government agency would define appropriate labor and use?
   2. 

      5/25/08

      daniel23

      The question really is, which government agency enforces the land monopoly and usurious rent?
      
      "Libertarians in the classical libertarian tradition, such as Thomas Jefferson, Thomas Paine, John Stuart Mill, Albert Jay Nock, Frank Chodorov, and various others, recognized that liberty requires limiting the power of landlords, just as it requires limiting the power of government at all levels. There need to be limits on the power of the landlord level of government, as well as limits on the power of government at all other levels of government."
      
      www.tpaine.org/mikeland.htm
4. 

   5/25/08

   ekim941

   On the car loan you only used 10% of the principal that you used for the mortgage. Your payment reflects the shorter term and much lower principal.
   
   To get a 7.15% car loan and a 3 year term is a bit optimistic. New cars typically are 5 to 7 years and 9% with good credit.
   
   I'm not sure that I grasp your point based on the numbers you provided.

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   1. 

      5/25/08

      oims

      Hi ekim, we got our truck loan for around 6% actually on 17,000 - and since the interest I show for the car is three years worth, but you are right. The loan as a house would include just over 104,000 total with payments of 909-ish give or take. Still a heck of a lot less per month than paying over 200,000 back FIRST before hitting the principle.
      
      Plus I was just making a point... mortgage loans should be illegal.
   2. 

      5/25/08

      ekim941

      But then no one would own a house. Auto loans are front loaded, you pay interest first. So, it's the same deal. Typically Mortgage interest is much lower.
      
      My truck loan was 11% my HELOC was 5.6% I paid off my truck with my HELOC and saved 6K in interest alone. I'm definitely missing something with your strategy.
5. 

   5/25/08

   lrembo91

   I understand the 'effect' you are trying to lay out... they are slick and crazy at the same time. We should not be paying for 30 yrs cause the first couple of years is the interest and not the principle.... if they made it 10 interest and the rest principle, people might even pay off a home faster and more money into the economy.. no, that would not work with this administration!

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   1. 

      5/25/08

      oims

      hey forcedgreen
      
      thanks, and it's more than the first few years, I believe it's like the first 18 or more for a house loan before things start going the homeowners way... and ekim don't hold me to the 18 maybe it's 10+
6. 

   5/26/08

   balidreamhome

   I just bought my 1st house but I am not counted I just live in it :-)

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7. 

   5/26/08

   JacobDiv

   Your point is 100% right. There a ways of taking advantage of your idea. The thing is, it can require a little delayed gratification, like paying for a house instead of an expensive car.
   
   By paying extra every month on a mortgage, you can cut the time it takes to pay by a lot. Another way to do it would be to get a shorter term mortgage. Either way, you can approach the average monthly savings you mentioned, over the 30 years of what the mortgage would have been compared with doing what you said.
   
   It's what my wife does, sending in extra on the mortgage to cut the length of time we are paying. When it's early in the mortgage, as it is for us, the little bit of extra triples the amount of principle we pay down each month. So, paying an extra hundred bucks might cut 2 months off the end of the mortgage, something like that. Over the years, a lot of months can be cut off that way.
   
   I remember my father, a bank lawyer, explaining this when I was 13. Like a lot of things, easy to understand, hard to pull off.

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   1. 

      5/27/08

      oims

      Good point mister Paying a little bit extra every month is ideal, if you can swing that extra little bit. With housing prices (those who bought at the peak of a shift) touching the glass ceiling - and money on hand slipping away (increase in just gas costs alone having tremendous impact on one's wallet), for many finding that extra little bit will be difficult.
      
      My thought on this initially was something along the lines of why are we (the masses) taken to the cleaners by the few?
      
      And why do we accept this as our fate?
      
      And of course, how is it possible to change this fate or is it??
8. 

   5/26/08

   MadameX

   What you propose here isn't a new way of thinking about home mortgages but what was the ONLY way of thinking about home mortgages until the 1990s. Prior to that time, the vast majority of home loans were fixed-rater 20-30 year mortgages. Unfortunately, what began as an honest effort to find creative ways to make home financing a realistic possibility for people who would otherwise not be likely to be able to purchase homes shifted dramatically when the mortgage industry noticed just exactly what you've pointed out here--that it was possible to get tens or even hundreds of thousands of dollars in payments from a "homeowner" before actually allowing him to accrue any equity in a home. That meant that it was possible to collect tens of thousands of dollars (or more), then foreclose and have a 100% interest (or very nearly so) in the property. That was so profitable that a whole new industry sprang up, with new companies specializing in "exotic mortgages"--or at least, that's what they called them in public. Behind closed doors they were referred to as "foreclosure loans".
   
   If all mortgages were as you describe, fewer people would qualify and there would be far fewer foreclosures. But quick profit would be reduced, as well--or at least, that's how it would have been in recent years. Now, the system has blown up to the point that it's no longer profitable to do business with a higher-risk client on a 50-year or interest-only loan, and so the tide is turning back to what you describe here (and the way in which homes were financed for decades before).

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