Yearly net worth

[Bobber]

I am a former banker. Senior Citizens have income, it's called Social Security. Bankers will not give you a loan if you don't have income to pay it back. It's really that simple. Show me a banker that will give you a loan on no income then give me his phone number so all my unemployed friends can call him/her.

Go to California or Florida. They seemed to do it a lot the way the housing market is..:sad:

Point well taken. I don't have banker, because I don't have any debt so don't have to worry about these things which is exactly why I think Balken has the right idea.:yes:

 

[jamesfnb]

Think about what you're saying. The loan is based on Home Equity, not income. How do you think Senior Citizens get these loans? They don't work.

If a Senior Citizen's social security check and/or income from investments is not big enough to support their debt payments then the other option they have is a Reverse Mortgage (assuming they have home equity). Reverse Mortgages are not exactly a good option.

 

[jamesfnb]

Go to California or Florida. They seemed to do it a lot the way the housing market is..:sad:

Point well taken. I don't have banker, because I don't have any debt so don't have to worry about these things which is exactly why I think Balken has the right idea.:yes:

Congrats on having no debt. That is GREAT! Now hurry up and save/invest some money in case you lose your job and need cash.

 

[Bobber]

If a Senior Citizen's social security check and/or income from investments is not big enough to support their debt payments then the other option they have is a Reverse Mortgage (assuming they have home equity). Reverse Mortgages are not exactly a good option.

Okay.. That's the one I was thinking of.

I agree, but if a senior is cash poor, but house rich it's an option for them to help pay bills.

 

[Bobber]

Congrats on having no debt. That is GREAT! Now hurry up and save/invest some money in case you lose your job and need cash.

I have all along. I did both...

 

[balken]

"I am not advocating saving nothing, but that aside, the above example of losing your job works both ways. If you lose your job and are carrying a longer term mortgage, you will have a more highly leveraged home and the tax advantage of your higher interest payments will be mitigated as your income is reduced. If you had taken a shorter term note, you will have a asset that can be leveraged for cash and be in a more desirable position to renegotiate to protect the asset."


I want to know your banker because the unemployed people I know are obviously getting a raw deal from their banker. Bankers don't loan against your asset (house), they loan against your income. How do you propose a person with no job and no income, get a home equity loan even if their house is 100% paid off?

I think we agree here more than we disagree.

They may not be in desirable position to leverage the home, but I find it highly likely that there would be access to credit, even without employment, from existing lines of credit.

I stand by the overiding point and every other point in the post from which this was pulled.

 

[Ficklone02]

They may not be in desirable position to leverage the home, but I find it highly likely that there would be access to credit, even without employment, from existing lines of credit.

I stand by the overiding point and every other point in the post from which this was pulled.

I know anytime I have ever talked to a banker about a heloc, one of the first questions I was asked was about my monthly income. I don't think the banker was inquiring about my income for his health. I'm no banker, but income matters.

 

[BryceC]

Based on what I understand from Dave Ramsey you're supposed to have an emergency fund in case you lose your job and you're also supposed to contribute to your 401k up to the amount your employer matches. Plus, prior to paying down your home you're supposed to have 3-6 months wages saved up, start saving 15% of your income in IRA's and mutual funds, and save for your child's college fund.

Also, you are supposed to save as you go for things like gifts and automobiles.

I know what you're saying jamesfnb, I just think you're grossly misrepresenting the system.

 

[Phaedrus]

There is one more thing to add, I believe. The kind of discipline it takes to execute Dave Ramsey's system is inconsistent with someone who loses their job and stays out of work for any significant amount of time.

Basically, if you have the gumption to execute the system, you'll do what it takes to make the money you need to survive. Motivated and intense people do that.

The idea that you will somehow be unable to earn income at all is also a straw man argument.

Of course, under the Total Money Makeover system (which is the actual name of it) you have LTD insurance which takes care of any long-term illness issues.

 

[drmwevr08]

Dave Ramsey is my hero. Remember, paid off mortgage is the new BMW in the driveway.

And if nothing else, youve paid off more of his stuff, so I guess everyone is happy...

 

[jamesfnb]

Based on what I understand from Dave Ramsey you're supposed to have an emergency fund in case you lose your job and you're also supposed to contribute to your 401k up to the amount your employer matches. Plus, prior to paying down your home you're supposed to have 3-6 months wages saved up, start saving 15% of your income in IRA's and mutual funds, and save for your child's college fund.

Also, you are supposed to save as you go for things like gifts and automobiles.

I know what you're saying jamesfnb, I just think you're grossly misrepresenting the system.

Your version of the Dave Ramsey's Total Money Makeover sounds like the Jamesfnb Total Money Makeover. I like it.

 

[jamesfnb]

There is one more thing to add, I believe. The kind of discipline it takes to execute Dave Ramsey's system is inconsistent with someone who loses their job and stays out of work for any significant amount of time.

Basically, if you have the gumption to execute the system, you'll do what it takes to make the money you need to survive. Motivated and intense people do that.

The idea that you will somehow be unable to earn income at all is also a straw man argument.

Of course, under the Total Money Makeover system (which is the actual name of it) you have LTD insurance which takes care of any long-term illness issues.

I give up. Uncle.