Last October, I mentioned that I had finally hit a net worth of zero, celebrating the occasion of being officially worthless. At that point I mentioned that my next step was to buy a house. I can now say that I finally did get down and buy a house, closing a few months ago on June […]
Last October, I mentioned that I had finally hit a net worth of zero, celebrating the occasion of being officially worthless. At that point I mentioned that my next step was to buy a house. I can now say that I finally did get down and buy a house, closing on June 13th). I started […]
I wanted to follow up on our Monday piece with a bit more math (I’ll do it for you – I know you don’t want to bust out the TI-83 in a vacation week). Today’s piece hinges on ‘mortgage qualification’, because of a few comments on Monday’s piece. In a nutshell, mortgage qualification comes down […]
As of the writing of this article (weekend before the 4th), 30 year mortgage rates are now at roughly 4.4% on average nationwide – 4.39%, according to Bankrate. As recently as early last month, Bankrate showed average rates at 3.40% on a 30 year mortgage. It’s not that the current mortgage cost increase is unprecedented […]
I love Canada. I say that without a hint of sarcasm. I speak for a majority of Americans here – jokes about hockey, curling, and freezing temperatures aside, we really do want Canada to succeed. Your neighbors to the south (The United States) recently went through some incredibly hard times in our real estate market […]
Not to heft blame on any particular entity for the housing collapse (well, in this article anyway), but one of the instruments that allowed the bubble to run so high in the first place was the Collateralized Debt Obligation. The CDO, as it is known, combined separate tranches (levels of security risk) of mortgages into […]
The last time we talked about the mortgage interest deduction, I shared with you a chart on the percentage of returns in each income group taking the mortgage interest deduction. Today let’s take it a step father and look at the mortgage interest deduction geographically.
Bells are ringing! I am finally worthless! With my paycheck today my net worth has finally passed the literal and psychological $0 barrier. My financial leverage given a net worth of $1 is about 45,000-to-1. Let this be a lesson to everybody: massively over-leveraged financial positions can only end positively. Look at Long-Term Capital Management, MF Global, Bear Stearns and AIG: their executives still managed to escape with millions of dollars!
It has been mentioned here and elsewhere that the mortgage interest deduction in the tax code is a roundabout way of subsidizing banks. If interest rates are determined by supply and demand then the demand for interest rates is only dependent on what a taxpayer’s “effective interest expense is”. A new study suggests that most of the benefits fall into the hands of lenders.
We have dealt a lot recently with historically low interest rates and their implications on not only the cost of housing and mortgages, but also implications for consumer credit and inflation. Although we have explained home price affordability in the San Francisco Bay Area before, we haven’t discussed the large variance in regional real estate prices.