Thursday, August 14, 2008

Waiting for the ...

... other shoe to drop. Sometimes, when I read about the extremely hard times befalling the citizens of the United States, I wonder why I've been spared most of the worst of them. Don't get me wrong, I'm struggling to stay afloat myself sometimes ... but my home is secure and my bills get paid. I can't vacation in the Bahamas this year, or probably the next several, but I'm getting by ... so far. What I don't understand is ... who ever thought it was a good idea to get one of those adjustable rate mortgages?

When I started looking for a house, I figured I'd be more than happy to pay in mortgage form, what I was paying in rent during my postdoc. Matching that number to payments on a 30 year mortgage let me know pretty much the price of house I was looking at. So, I knew that when I started work full-time, even though my salary went up (Yay!) I knew I'd be able to make my payments (I would have had to pay rent anyways right?) but I was pulling in extra money that I could set aside so when things went wrong (plumbing, electrical, painting, roofs, appliances) that money would be there. If I went higher in my payments, it'd have been a wash and when something major hit, I wouldn't have the cash.

Yes, when I started looking my real estate agent took me to some that were over my looking price, but a stern comment and a threat to find someone who would actually work with me was enough to put a halt to that. Eventually we found some nice houses which would fit in my price range and were in a nice part of the city ensuring me (as much as things like that can be ensured) that it wouldn't become a ghetto (I live not to far from a private golf course/country club with two major developments on either side of my development, which is basically comprised of starter homes for middle class individuals like myself).

Anyways, so I sit here and read all this news and I wonder ... how did I avoid this mess? Was it smart planning on my part? I'd like to think that perhaps it was ... but it still leaves me with this uneasy feeling, as if I've missed something and that when it rears its ugly head it'll be too late for me to do anything about it. I guess that's what they call "consumer confidence" (or the lack thereof), eh?


Philip H. said...

I don't think you need to worry. you did the smart, educated thing. The folks in trouble now fall in to two distinct groups - those who knew what you know, could have done what you did, but chose to ignore prudence; and the folks who did not know this stuff, believed the mortgage brokers (who didn't have their best interests at heart), and are now really stuck.

Tom said...

Thanks Phil. That's sort of what I've been hoping is my case.