Termyn8or
Posts: 18681
Joined: 11/12/2005
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I saw, pre-crisis, an ad on TV. You can get $150,000 mortgage for only $530 per month. On a normally amortized loan, my quick and dirty figuring works out to less than 4¼% interest per annum.
I thought rates like that were for good customers with solid credit history, not for just anyone who can afford a TV and a phone. And it looks attractive, but first time buyers don't understand that is only PI, now when you add in TI you get a different number. In this area insurance isn't all that bad, but taxes HOLY MOLY. I've seen taxes on a $150,000 house run $8,000 a year, some higher. That more than doubles the payment.
Math was one of my strong suits until the higher algebra came, but I knew enough to beak it down and figure things out the long way. I was actually a math tutor for a time, but they lost me on the polynomials. That doesn't change the fact that not once did they ever mention amortization. The schools have failed. It's as if they think everybody is going to be a chemist or nuclear psysicist, but will never buy a house or car on credit. I know a high school and trade school graduate with a fairly technical job, who can't balance his checkbook. He eventually got his brother to balance his checkbook and luckily since he makes good money, he had a several thousand dollar surplus. Then he wants to know what to do. I told him to open another account, don't write any more checks on this one for a couple of months and then close it, take your money. If some check turns up in the future unpaid, just make good on it. He even had the carbon copies of checks, I told him NO, you make the ledger entry BEFORE you sign the check.
The other problem is people using debit from their checking, nice and easy right ? WRONG. Go to the store, to know the amount you must save the reciept. It's much better to just take a hundred out and then you can remember you took out that amount, rather than adding up $31.02+22.55+10.60.
Cheap, easy, fast and safe. That's how this crap got sold to the public, and they bought into it hook, line and sinker. I think sinker is an important word there because I bet alot of people can't say exactly how much they have in the bank, and I mean checking. '
In the US, students do among the most poorly of industrialized nations in mathematics. So while we are assigning blame, a slice of it goes to the school system.
In my case, Momma didn't raise any fools. I wll not allow anything to be tied to my main checking, any automatic payments (of which there is only one) are paid on a credit card. I haven't used my ATM card in years, except for deposits, and it is an ATM card only, at my insistence it doe not have a logo on it, and can only be used for a POS transaction with the PIN number.
Every house this family has ever bought was paid off early, because we know that we'll never collect anywhere near the interest they are charging, even at a good rate. You have to put ALOT of money in the bank to get anything more than 5% APY. And we also know that APY does not equal APR.
I remember this episode of Archie Bunker, Meathead says to a contractor "Isn't there a law against taking advantage of the feeble minded ?" and Archie says "If there ain't there oughtta be". Funny then, perhaps not so funny now.
T
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It's an F to an O to an R to an E.... - 
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