| |
  
|
||||||||||
Mortgage Loan
Submitted by PaStoneman on Thu, 01/29/2009 - 23:54
in
With the almost certainty of hyper inflation and the devaluing of the dollar, would it be more prudent to pay a mortgage off with todays dollar or with future dollars, as they become more plentiful and of less value? » |
|
|||||||||
The Daily Paul is a community website with no official affiliation with Ron Paul or his Presidential Committee. The content of posts and comments on the Daily Paul represent the opinions of the original poster, and are not endorsed, approved, or otherwise representative of the opinions of the Daily Paul, its owner, site moderators or Ron Paul. This site may contain adult language and adult concepts. If you are offended by such content, or feel you may be offended by such content, point your browser to a different site IMMEDIATELY. For more, read the Full Disclaimer
© 2007 - 2011 by The Daily Paul. Not paid for by, nor officially affiliated in any way with Ron Paul. | General Site Disclaimer | DMCA Disclaimer | Advertise here
I've been paying extra on my mortage the past 7 years
and never considered what a folly it could be. Sure the idea is to be debt free, but in reading Howard Huff's update to his "How to Prosper in the Coming Bad Years...", he said that a bank (remember they are evil) will be more likely to work with you if you can't make your payment, if you still owe a lot on it, but if you've got a $300K house with only $50K left on the mortgage, they would be less likely to work with you and would look forward to you going into foreclosure. Paying more on your mortgage helps benefit them. Like others have said, study the fundamentals on precious metals right now, ensure you have a little gold and a lot of silver. The idea is to ride out a lot of the inflation with your savings in precious metals, then trade some back in for dollars at the right time to pay down your debt.
Should i buy a house now!
I have 6k of silver and 30k saved! No other debt. Been living with my folks for two years after a divorce. I work for the auto industry in Detroit. Im seeing homes in the burbs for around 60k to 80k. I dont wanna screw this up! any suggestions?
Truth is treason in the empire of lies.
Precious metals
you are in a good situation - flush with cash and you are not losing equity in your home. Wait til Real Estate drops even more. Right now you are just looking to lose whatever equity you put in your home for down payment.
Make sure that you have 6 months of food stored up and then look into investing in more silver/gold and mining stock. This is the recommendation from Huff in his book "how to prosper in the 21st century."
For what it's worth...
If I were in your situation I would not buy right now, prices are sure to fall even more and banks and sellers will become more desperate in the next few months.
my 2 cents. don't go into
my 2 cents.
don't go into debt.
but, if you already are in debt, pay off your debt with crappy dollars.
dollars are not crappy right now, they are temporarily worth something...so no, don't pay off the mortgage or make extra payments.
i'm not in debt right now, but supposing I was....I'd pay minimums on everything.
and if your credit is in the crapper already, then stop paying on unsecured debt. (i.e. credit cards) if your credit is so-so, or better, then just pay minimums.
hoard cash, build an emergency fund, and buy a little gold/silver. a little.
when inflation hits, 5 months from now, or 5 years from now....you can use crappy dollars to pay down the principle on your debts.
now of course there may be other circumstances and factors which you are not sharing, so there might be overriding factors.
i.e. you are flush with cash, and are close to paying off the mortgage anyway...perhaps in that scenario a person would be debt free, own their home "outright" and still have cash reserves....and no other obligations. Of course a person in that situation would hardly be asking the question on a forum...as they would already be nimble money managers.
But if
you do a mortgage acceleration, you don't have to pay extra payments. You can pay your mortgage much faster, and still have money left to put in important items like ammunition and food. If you do an acceleration don't do an expensive one. You can get good ones for under $1,000 and they work great.
The way I look at it is this
If you hedge yourself with $25,000 in Silver right now.......and Hyperinflation does hit.......then when Silver is at $50 an ounce or so...you now can pay off your $150,000 mortgage with the original $25,000.
Silver at $12 per ounce right now......not for long IMHO.
that would be a fine option
that would be a fine option if they had $100,000 in cash reserves.
take 25% and put it in precious metals.
but if all they had was $25,000, that's not such a swell idea.
Also
In seeing how much things are really manipulated, I have no confidence that the price of precious metals, stocks, or anything else will act they they would in a truly free market. The stock market has stayed above 8000 now for several weeks in spite of how awful all the economic indicators are. Currencies are manipulated to affect trade. And gold and silver are also strongly manipulated as tied to the dollar. So I just don't trust that precious metals will ever be worth as much as some say they will be, and truly, as they should be now!
I would
try to pay it off as fast as possible. With hyprinflation, also comes less jobs as more people are looking for good jobs. If you lose your job and are making less money, your loan will be recalculated according to what you owe. If you paid it down to a lower principle now, your payment will be much lower and that could come in handy if you are in a bind. Just a thought.
I have thought about this also
but instead of playing with snakes, so to speak, do not seek out more debt in these times. The very best thing you can do to protect you and yours is to get out of debt and become truly free. Remember, the borrower is slave to the lender. Mathematically, yes, your mortgage would be easier to pay off in inflated dollars. Common sensically(?), just don't go there...
Yes, I agree with you that
Yes, I agree with you that we should not incur more debt and pay debt off that we presently have. I was just wondering how the banks will make adjustments in the mortgage rates as the dollar looses value. In effect the payee of the mortgage will be paying less value back as inflation increases.
that's exactly why
that's exactly why houses/fixed-mortgages are called "inflation hedges"
the problem with "inflation hedges", is if you paid too much for the house in the first place, then the "hedge" part ain't gonna work.
the other pitfall, the adjustment you refer too, can't happen with a normal fixed rate mortgage....but it's catastrophic results can be seen when people go with Adjustable Rate Mortgages.
d