The Inevitable New The Inevitable Trump Mocking Thread

Bruddah IZ said:
You're just wreaking of humility. Whether or not people could afford a loan doesn't change the fact that they, like you and I, were not and are not drawing any monthly Net Income from the homes we live in.
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Why the obsession with income? Equity is what creates wealth, not income.
 
messy said:
You were paying attention. The note holders got bailed out.
It wasn’t a “liability to begin with,” silly. Quite the contrary...it was like buying stock (an asset, correct?) high and betting it would keep going up. The stock could crash (as in right now)...it was still an asset. People loaned on the expectation that real estate “asset value” would keep increasing. It didn’t.
Right now, my stocks are still an asset, but losing value. And it’s true I don’t have specific liability, such as a margin loan, against these assets.
My real estate assets, on the other hand, against which I do have some “liabilities” (e.g., mortgages) are still maintaining their “asset value” much better than my stocks are.
So at this moment, real estate is a far more valuable asset than stock.
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Basically, what I've been saying all along. No Net Income from your home mortgage.
 
messy said:
Why the obsession with income? Equity is what creates wealth, not income.
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Right, but you need income to buy 20% of your home equity so that you don't have to pay for the banks Mortgage insurance (PMI). But equity is only valuable if you generate income from it or a profit. If the latter than you no longer have a liability, but cash assets.
 
Bruddah IZ said:
Right, but you need income to buy 20% of your home equity so that you don't have to pay for the banks Mortgage insurance (PMI). But equity is only valuable if you generate income from it or a profit. If the latter than you no longer have a liability, but cash assets.
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Backwards as usual. No other asset lets you take the full ride in increase when you only pay 20% to get in.

As I said, you get your income from your job.

Also, the house is not only an asset, but for tax purposes it’s called a “capital gains asset” (if you want to check on that, go to the federal tax code) so you pay far less in taxes on the sale than you would pay in income taxes from rental revenues. In my case, those profits are worth about 30% more than “income.”
Combined with the deductibility of my mortgage payments...can’t beat it.
 
messy said:
It wasn’t a “liability to begin with,” silly. Quite the contrary...it was like buying stock (an asset, correct?) high and betting it would keep going up. The stock could crash (as in right now)...it was still an asset. People loaned on the expectation that real estate “asset value” would keep increasing. It didn’t.
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Once you buy a stock, you are buying equity. You are saying to the company, go make money with my money and thus you have an asset when your stocks earn money allowing you to do whatever you want with those gains. If the company ever has to liquidate, lenders (Corporate bond holders) get paid first. Stock holders last, if at all. Banks lent money because they knew they were percieved as TBTF and thus were bailed out, helping you and I to maintain some equity in our homes and stocks. That's why they call stocks equities.
 
Bruddah IZ said:
Once you buy a stock, you are buying equity. You are saying to the company, go make money with my money and thus you have an asset when your stocks earn money allowing you to do whatever you want with those gains. If the company ever has to liquidate, lenders (Corporate bond holders) get paid first. Stock holders last, if at all. Banks lent money because they knew they were percieved as TBTF and thus were bailed out, helping you and I to maintain some equity in our homes and stocks. That's why they call stocks equities.
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I pay $10 for stock that’s worth $10 and hope that the company does well and grows the value of my stock. If it goes up by 20% in 2 years, I get $12. I paid 10 and got back 12.
I pay $2 for $10 worth of real property and pay the rest off over 30 years at a very low interest rate, which I deduct.
If it goes up by 20% in 2 years, I get $12. But I only paid $2! And I lived in it for 2 years!
See how that works?
So the other $8 I used to buy the same stock and made 20% on that!
 
messy said:
I pay $10 for stock that’s worth $10 and hope that the company does well and grows the value of my stock. If it goes up by 20% in 2 years, I get $12. I paid 10 and got back 12.
I pay $2 for $10 worth of real property and pay the rest off over 30 years at a very low interest rate, which I deduct.
If it goes up by 20% in 2 years, I get $12. But I only paid $2! And I lived in it for 2 years!
See how that works?
So the other $8 I used to buy the same stock and made 20% on that!
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LMAO!! Nice job Krugman.
 
espola said:
Or you can just agree to pay a higher interest rate, or search for a lender that will give you a better deal.
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Neither of which will eliminate the requirement for PMI unless you're using the VA guarantee. In which case you pay a 2.15% of the loan amount funding fee.
 
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