Hello again. (My numbers: House worth roughly $450-500k, owe $140k, One modest income+ one uni student/part time worker, graduating end 2012= better job prospects then) I'll bet there are quite a few mortgagor stackers in here. How do we rationalise buying silver AND paying the mortgage, rather than just paying more into the mortgage? Does it take a superduper income that can adequately cover both? Should mortgagors of modest means not stack at all? Any opinions welcome, including biased ones!
if mortgage rate is > the % increase you expect from silver go mortgage if mortgage rate is < the % increase you expect from silver go Silver
I'm in this situation. Have forward paid mortgage for a while (about 6 months ahead) and am now building a (smallish) stash. If SHTF day comes, what use is paying off a mortgage to a bank that'll take the money and fold? The silver will keep the family alive and well (and a shotgun will keep off the rampaging mobs of unprepared). Is my position morally questionable and dishonourable given I'm happy to welsh on a debt if the system goes down? Maybe. My thought is that if the system fails, all bets are off and its time to re-order priorities.
Yes. Silver is good for SHTF, no question. It also feels good to be able to hold something. I think my house is kind of the same. I enjoy picking up a handful of dirt and calling it mine. The dilemma is they make it easy as pie to redraw extra mortgage payments, but I find it a lot harder to liquidate my precious silver just to pay for something else. thatguy> I'm afraid I'm too new to know what kind of % increase I expect in silver. If someone chooses silver by your formula, I suppose the plan would be to knock off the end of the mortgage someday by selling the silver?
Yup thats the one . IF silver goes up by a piddly 8-9% YoY I will be having some very stern words with a inanimate pile of Ag atoms
This! I'm holding silver in hopes of speeding up clearing out the mortgage debt - so far so good compared to if I had it as extra repayments. Then again, if life takes an unexpected mad max direction, at least I'm holding real money.
Interesting question. Currently I pay about $10 - $12k per month off my mortgage, but over the past 9 months or so I've been spending as much per month on both silver and gold, being a latecomer to PMs in general I reckon I had a bit to catch up on. Now with gold at $1750 I reckon I may concentrate on the mortgage for a while, but I know I won't be able to resist the pull of PMs for long!
I solved the problem easily. I sold my house while the selling is still good. I think it's a good bet so I took the plunge. My logic was that using my income to service the loan on a property that was not rising in value is not going to do anything for me. Therefore, taking that money out of the property and into gold and silver was a more effective use of the financial assets available to me. 1) It cleared out the remaining debt I had on it 2) It gave me more funds to invest in gold and silver 3) I wait for the housing market to take its long overdue nosedive 4) I get back into property by buying outright with my (hopefully) increased purchasing power and deflated housing prices 5) I rent in the meantime I know it's a risk, but the pieces fit together: * The housing bubble in Australia has not yet popped because we're still protected by the mining boom * When the next big recession comes, all those people mortgaged up to 95% of the value of their property will start letting go, unable to service their payments * More housing supply on the market but people will be scared to buy even at lower interest rates because of future uncertainty - prices will need to drop to more realistic levels * All those investors who jumped on the investment property bandwagon with negatively geared property will start letting go when housing prices fall because they get the double blow of losing money on their investment AND seeing capital depreciation * Housing supply increases while prices are going down
(Selective quoting, not to distort your original comments, but to highlight for the question, apologies if the selectivity offends/upsets!) I too am waiting for this, believing that housing prices at the moment are in a bubble. The real question on my mind is twofold - when do folks think the bubble will burst, and what decline in prices are we likely to see?
Hi Churchmouse Is the property special to you or just an investment for long term ? I guess what I'm getting at is if it is somewhere you are comfortable and happy with long term and want to be then I would balance things out. If not....well then I would get out while the going is still sort of good or concentrate on stacking more till forced to make a decision. You are already a committed stacker but how committed are you to the house? Of course other factors come into it such as equity and value etc but things are not looking that good for RE values in the near future while the prospects for silver are looking up. also if you did decide to sell and reinvest the equity are you also considering gold?
Hmmm. If I max out my mortgage, we will have trouble affording the repayments. The extra I have in redraw is what keeps it affordable, at least until I get out of uni. I know uni is no absolute guarantee of a good job, but a full time job of any description would see us laughing. Even if I pay the minimum necessary on the mortgage, there isn't a huge amount left over to go crazy on silver anyway. I'd still like to, though.
When discussing mortgages and banks , do not mention Morals and Ethics - as it will cloud your judgments. If the Bank can print money out of thin air ( read your future earnings ) and start charging you interest on the just created principal sum of money, and they can do that with a smile on their face and a clear conscience - why should you than think of morality and ethics regards paying of the mortgage and such stuff.
I think you nailed it there. It depends on whether you love your house or not. This is a long term family home. I'd rob a bank before I'd let anyone take it from me. Having said that, I'm drawn to silver and hard asset investing in general. I said earlier it's easy to spend redraw and harder to spend silver, but it feels a little less like theft to flip silver to pay for something, rather than pull it out of the mortgage. (Hope that sentence made sense.)
Your statement rings with truth. It was not the bank's morals I was examining (BTW organisations can't have morals despite being legally "persons" - what bs) but my own. I have to look myself in the mirror each day. I have to feel comfortable with my actions. Hence the final decision of "to hell with them, family comes first", which is a really easy decision to make 'cos its never in doubt!!
I think you have answered your own question, A real home is Irreplaceable , if you can manage the flip without endangering your "Home" go the redraw, even if you have to sacrifice some silver to manage the risk it seems you know what is more important to you.
Sell the house. Use the proceeds to buy silver and gold. Wait a few years. Then buy the house back...... with the profits.
You say that you are six months ahead with your payments..Does it make any difference to the amount owing on the loan or does it mean obviously that IF TSHTF that you will be right to pay no payments for 6 months or does it go to Capital reduction? If would seem to be a shame to give the bank thousands of dollars at 0%..Why not pay 2 payments ahead and ride the silver tiger and If TSHTF sell the silver tiger, and you might even have enough fiat to keep the wolves from your door for a much longer time. Please do not take this as advice or anything like that..I was just pondering of what I would do in a situation as you describe. It is always good to see people trying to make themself and their family secure in such a crazy world that we have today. Regards Errol 43
