thank you all for the advice.
florida is a recourse state, and that has always been my biggest fear and deterrent.
i believe i will just start a savings CD where I will squirrel away all that I can as motivation. I don't know if I will actually put it down on the house itself, but it will be there incase I do need to move for any reason.
Not disagreeing that good credit is convenient (because too many places rely solely on FICO scores), but contrary to what you said, "shitty" credit doesn't mean you're a dishonest person who doesn't pay his debts. You can have "shitty" credit on the way down to the "shittiest" of ZERO if you have NO debt and pay cash for everything.
Big Tobaccy wrote:
worst possible timing wrote:i pay cash for everything, why do i need credit?
Insurance (Life, Home, Car, Medical)
Mobile Phone
Cable
Renting ANYTHING at all (car, beach house, mountain house), even just for the week with your family
Gas
Electricity
Companies pull your FICO all the time. If you have shitty credit, it means you are a dishonest person who doesn't pay your debts. Why would a company want to trust you? Why would they want you as their customer?
With regard to insurance, this will mean huge deposits and low-grade policies, if they agree to cover you at all.
Flagpole wrote:
You can have "shitty" credit on the way down to the "shittiest" of ZERO if you have NO debt and pay cash for everything.
Well, as a banker who has loaned to people, corporations etc. for over 20 years, I want to point out that someone who never established credit is viewed as a much lower risk than someone who bailed on a debt.
We see 999 FICOs that usually mean credit was never established. While we might not lend immediately, we would do the research prior to turning them down. We would be much more willing to work with them than someone who walked away from a balance due.
Walk away. Why should you hold yourself to a higher moral standard than the banks, developers or anyone else in that industry? It's a losing battle. Know when to cut your losses.
Kind of my point. I only have a mortgage; well, that an revolving credit on a credit card I use that I pay off each month. Eventually I plan to not have a mortgage and will then not borrow any money from anyone...except I'll probably keep my credit card for convenience and just pay the balance each month.
BANKER MAN wrote:
Flagpole wrote:You can have "shitty" credit on the way down to the "shittiest" of ZERO if you have NO debt and pay cash for everything.
Well, as a banker who has loaned to people, corporations etc. for over 20 years, I want to point out that someone who never established credit is viewed as a much lower risk than someone who bailed on a debt.
We see 999 FICOs that usually mean credit was never established. While we might not lend immediately, we would do the research prior to turning them down. We would be much more willing to work with them than someone who walked away from a balance due.
was motivated to investigate more.
my mortgage resets in Sept.
With my ARM and current LIBOR my interst rate would go from 7+% down to under 3%
my payment will drop by about 700 per month.
I will decide to either A. Just keep the payment the same and put that 700 a month toward the principle, or B put the extra money in an account as house savings.
As long as interest rates stay down, looks like my ARM will be a good deal.
That makes sense. I was wondering how in the world your rate would go to 7% on an ARM.
If you still want that single family home you mentioned you have to hang onto this house.
With the lower mortgage you may be able to rent it out at break even on monthly cash flow.
Move into an rental for yourself for 6 - 12 months and get a renter into the home you own.
Once that is established you can go buy the home you want if you are willing to stay there for a good while. Or wait until you are ready. You will own two homes.
As your renter pays down your mortgage and values rise (or not) you will gain equity in the investment home as well as your owner occupied home.
Sell it when you're ready or keep it long term for a bigger gain.