Stock market on fire

[Camelfilter]

A little off topic.

I've recently saved a significant amount of money to be used for down payment on my first home, inflation being what it is, concerns over home prices, etcetera.

Am I foolish to hold large sums of cash opposed to taking on more debt than I believe would be responsible for said purchase?

Do any of you believe the real estate market will correct? Before the big crash many speak of?

Thanks everyone, you all and the knowledge I gain here is much appreciated.

Fixed rate mortgage SHOULD be safe, for a time anyways, if we go hyperinflationary.

It will take a bit of time before THEY figure a way go legally breach everyone's contracts & turn them adjustable.

IMO.

As towards market crash? Yup, coming. However also depends upon location & such as towards how bad.

Some metro areas were "barely" affected by the last one...

 

[sobo]

A little off topic.

I've recently saved a significant amount of money to be used for down payment on my first home, inflation being what it is, concerns over home prices, etcetera.

Am I foolish to hold large sums of cash opposed to taking on more debt than I believe would be responsible for said purchase?

Do any of you believe the real estate market will correct? Before the big crash many speak of?

Thanks everyone, you all and the knowledge I gain here is much appreciated.

Foolish to hold onto massive sums of cash in this "transitory" ( ) inflation period. Cash is getting more and more worthless by the day, so dump the massive cash pile into the home, which will at least hold some value and act as a hedge against that inflation. Keep some cash in your gun safe for when the SHTF, cuz it will be useful early on but later, not so much.

One would hope that the banks learned their lesson in 2007/2008 (but don't count on it) and we won't have another subprime mortgage-style toxic asset meltdown again. But as @Camelfilter points out, the .gov will soon enough figure out another way to screw the Middle American...

 

[jblake00]

 

[jblake00]

I like watching this guy. I don't take everything he says as gospel, but I don't think he is far off base either.

 

[USMC1911]

A little off topic.

I've recently saved a significant amount of money to be used for down payment on my first home, inflation being what it is, concerns over home prices, etcetera.

Am I foolish to hold large sums of cash opposed to taking on more debt than I believe would be responsible for said purchase?

Do any of you believe the real estate market will correct? Before the big crash many speak of?

Thanks everyone, you all and the knowledge I gain here is much appreciated.

Fist off congratulations on the hard journey of saving for a house. I know its not easy. Someone who is much much smarter and infinity more wealthy then myself told me to NEVER hold larger cash reserves then about 6 months. He called it dead money. Money not working at its sole purpose of making you more of it. If you cant afford to loose it invest it that way. Were not playing the lottery were building wealth. Lots of ways to make it work for you with as little or as much risk as you want but dont just let it sit. Almost any investment can be liquidated in hours or days if needed to say purchase a house.

As for a housing crash before an economic crash? Don't think so as housing imo is more reactionary and in the past has not been a leading indicator going into an economic decline. Always exceptions but look at historical price of real-estate. Wish ya would of purchased last year? If you are looking to purchase now I bet ya do. Wish you would of purchased 5 years ago? Housing always recovers. Not sure how much you got saved. If its enough to keep you out of mortgage insurance thats the most down I would put on any house. Put any money left after that to work as borrowing money right now is almost free.

 

[The Heretic]

A little off topic.

I've recently saved a significant amount of money to be used for down payment on my first home, inflation being what it is, concerns over home prices, etcetera.

Am I foolish to hold large sums of cash opposed to taking on more debt than I believe would be responsible for said purchase?

Do any of you believe the real estate market will correct? Before the big crash many speak of?

Thanks everyone, you all and the knowledge I gain here is much appreciated.

I don't know - not sure there is a chance of a housing bubble and then deflation of housing prices like there was in 2008. I know that is not what you are asking (I think), you seem worried more about inflation and/or economic crash in general - but still...

I was debt free in 2007-08 and house shopping with a $70K cash reserve for a down payment. At that time, there were some smart people warning about the bubble - had been for about 5-10 years or so? OTOH, a lot of people were saying "buy, buy, buy - house prices are going nowhere but up", so I finally decided that I was tired of waiting for the bubble to pop, I was going to buy.

Then I got laid off and the bubble popped before I could buy a house.

Three years later, I got a job here in Portland. One year after that I started shopping around. Got a good deal on my current property - which, in 2007, had been valued at $200K more than I paid for it in 2012. Now that property is valued at twice what I paid for it. So there is that.

The current thinking by the "experts" is that housing will not get cheaper, but that next year price growth will slow down. That kind of coincides with what the stock market is expected to do next year. I think at best, for buyers, there will be a lot of sellers who won't lower prices from what they are now, but they probably won't increase them either. I don't think that the prices will drop, but you might pick up a decent deal.

Also, interest rates are good - half what I am paying, and 4% wasn't bad for a manufactured home on acreage in 2012. So there is that. I assume you are planning to keep the house for 5-10 years, if so, then I would probably jump in now if you can find an affordable house with good appreciation potential that you like. Even if prices drop, they will rebound in a few years, and it is likely that your rent/lease (I assume you are renting) won't get cheaper, so you will be building equity.

Then there is your income stability - for me, that was the big issue; I had just started a new job. Luckily I hung onto that job until last year, so I was able to build equity, build savings (401K, IRAs & cash) for 8 years, and last year I reached FRA - so it all worked out. Today my income is one third or less what it was prior, but it is enough to pay all my bills, including my mortgage.

 

[ma96782]

Smith & Wesson (SWBI) to Post Q2 Earnings: What's in Store?

Product launches, increased market share, rebranding efforts and cost savings will reflect in Smith & Wesson Brands' (SWBI) fiscal second-quarter results.

finance.yahoo.com

Why Smith & Wesson Shares Are Diving Today

Smith & Wesson Brands Inc (NASDAQ: SWBI) is trading lower Friday after the company announced worse-than-expected fiscal second-quarter 2022 financial results.

markets.businessinsider.com

Aloha, Mark

 

[albin25]

booming housing market?... for how long?

My wife and I own a 3 br house/condo free and clear in Texas that we are currently renting to our daughter for her paying the property taxes, utilities, insurance, assoc fees., etc....
Now that she has a really good job at Texas State U, she's thinking of buying a house. I'm concerned that the housing market is too close to busting to pay the current prices and risk getting "underwater" on a mortgage.
I'd like to sell the place to her and carry the mortgage for her....
.... can I sell below market to her, and call the difference the "down payment"' ?
.... and, could/should we ?
or, would it be better/possible/simpler to put her on the title then mortgage it and then file a quitclaim so she's the only name on the title.

any thoughts?

 

[ma96782]

I guess these things should be discussed with a financial advisor because just to start.........we don't know about you and/or your particular situation.

Example:
How many kids, grand kids, other people, or charity that you might want to leave stuff to?
What is your estate valued at?
Do you even TRUST fully that your kid will NOT P$$ it all away?
Your income and tax bracket?
Daughter's tax bracket and income?
Loan....do you really expect to collect?
Or maybe leave it until after you and the wife perish?
Wait.....what about the new boyfriend?
Do you even have enough for yourself?
Have you taken into account.....your plans?
Etc.....etc....

TRUTHFULLY......I wouldn't want to discuss these things on the internet.

Aloha, Mark

 

[USMC1911]

booming housing market?... for how long?

My wife and I own a 3 br house/condo free and clear in Texas that we are currently renting to our daughter for her paying the property taxes, utilities, insurance, assoc fees., etc....
Now that she has a really good job at Texas State U, she's thinking of buying a house. I'm concerned that the housing market is too close to busting to pay the current prices and risk getting "underwater" on a mortgage.
I'd like to sell the place to her and carry the mortgage for her....
.... can I sell below market to her, and call the difference the "down payment"' ?
.... and, could/should we ?
or, would it be better/possible/simpler to put her on the title then mortgage it and then file a quitclaim so she's the only name on the title.

any thoughts?

If you carry the mortgage sell for whatever you want as you are effectively the bank. Taxes are what I would worry about as you are still gonna get nailed for taxes on the value. Might want to look into placing it in a trust or a type s corporation to avoid gift and or inheritance taxes but still get money out of it. Lots of games to play to avoid taxes if ya want. Type S is pretty complicated and takes several years and a good amount of financial means to work effectively but really has a ton of benefits if willing to play the game.

Edit: Consult a tax lawyer or cpa that deals specifically in the area of real-estate as the laws and taxes are extremely complicated.

 

[sobo]

would it be better/possible/simpler to put her on the title then mortgage it and then file a quitclaim so she's the only name on the title.

I've "sort of" run into something like this. I never actually went through with it, since it was going to cost just under $1,000 to make it happen.

I was trying to get someone off of a mortgage before they died, so there wouldn't be any probate or claim of ownership issues after this person expired.
It was easy enough getting this person to sign the QCD and filing that, but that's only half the issue.
The QCD only gets the person off the title at the courthouse (Auditor's Office, Treasurer's Office, County tax records, etc.) from an ownership perspective.
The QCD does not get them off the mortgage, from a financial perspective. That's a separate and distinct operation.
The mortgage company wanted to charge me close to $1,000 for a loan assumption, even though the person I was having removed from the mortgage had never made a single penny of a payment and was never going to (that was part of our original agreement).

So, my advice is before you do something like what you're asking, is to investigate if it is actually going to accomplish what you want it to accomplish, and for how much money. Ultimately, I didn't do the assumption loan, and the other person eventually died. So in the end, I ended up with the property totally in my name, I had made all of the payments for the property all along, and now that the other person is dead, it just became my property anyway. Your situation is reversed, in that you hope that your daughter doesn't die, and that you don't die for quite a while yet. But I think you get the point I'm trying to make - the QCD (an ownership instrument) will take you off the title, but it won't take anyone off the mortgage (a financial instrument). And getting yourself off the mortgage will cost you money in the form of a loan assumption.

Now, if you do what @USMC1911 is saying (that you are the "bank"), then none of what I just said will make much difference. You essentially will write a Real Estate Contract (REC) between yourself and your daughter, and you will hold the contract yourself, and a bank is not involved.

 

[teflon6string]

Stock market "on fire?" More like a dumpster fire these past 2-3 weeks.

 

[bolus]

This guy seems pretty convinced of the incoming crash (the guy that bought the Evergrande bonds to prove they were not paying interest)
I wonder who will play him in the movie?

 

[Camelfilter]

This guy seems pretty convinced of the incoming crash (the guy that bought the Evergrande bonds to prove they were not paying interest)
I wonder who will play him in the movie?



View attachment 1083796

Problem with his plan is that once a collapse occurs there will LIKELY be no physical precious metal inventory available to buy.

Speculations on any precious metals will be as worthless as all other non-tangibles.

In my opinion.

 

[bolus]

Problem with his plan is that once a collapse occurs there will LIKELY be no physical precious metal inventory available to buy.

Speculations on any precious metals will be as worthless as all other non-tangibles.

In my opinion.

Yeah, if what he thinks is going to happen does happen, then I think it will be better to invest in lead than gold.

 

[bolus]

Derivative bubble.

Page down slowly:

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[ma96782]

It's Monday. The major indices.....it is said.....have erased last week's losses.

Aloha, Mark

 

[jblake00]

Yeah, if what he thinks is going to happen does happen, then I think it will be better to invest in lead than gold.

Little lead and a little gold is just good diversification!

 

[The Heretic]

It's Monday. The major indices.....it is said.....have erased last week's losses.

Aloha, Mark

Some of the losses; I still have a ways to go until I restore my previous high.

 

[ma96782]

Will we still have a..........

Santa Clause Rally?

Aloha, Mark

PS......personally, I think YES. I've nothing to back that up. It's just my SWAG (Scientific Wild @$$ Guess).