Lenten Thanks: Day 1
I thank God for my beautiful son, who has grown into a hard-working man with great common sense, a wide-ranging intellectual curiosity, and deep loyalty for his loved ones.
The dominant Realtor in the neighborhood just sent out her occasional newsletter. A house in the area just to the north, which is starting to look pretty blighted, sold for $58,900.
In my neighborhood, the best price was $222,000. But that was for a 2,013-square-foot house. Apply the square-foot price to my shack and you get $203,277. Not good, considering that I paid $232,000…before the bubble started to bloat.
At the time I decided to pay off the mortgage on my last house—the sale of which made it possible for me to pay for this house in cash—my financial advisers had their predictable litter of kittens. Conventional wisdom so values the tax write-off on residential mortgages that most people are convinced it’s best to be in debt up to their teeth, as long as it’s so-called “good debt.”
Well, one thing the present depression has shown us is that there is no such thing as “good debt.” Debt is debt, and it’s all bad for your financial health, unless you’re a major corporation or a government, in which case leveraged debt is a characteristic of the alternate universe in which you dwell. For the homeowner, mortgage debt is no better than credit card debt; in fact, it’s probably worse, because it’s so much more massive and because its collateral is the roof over your head.
If I owed on this house, heaven only knows how far underwater I’d be…and that wouldn’t count the $61,000 loss we’re taking on the downtown house’s mortgage. And of course, 61 grand isn’t the half of it: it’s not the difference between how much you owe and how much the house is really worth that counts; it’s the phenomenal amount of mortgage interest that’s swirling down the drain for every underwater homeowner in the country. If we end up stuck with the downtown house for 30 years, until the mortgage is paid off, we will have paid twice the amount of the loan for a house that’s worth about 64 percent its sale price.
We certainly will lose that house and all the money we’ve put into it. Unless a miracle happens very soon, we won’t have much choice other than to walk.
But at least I can say this: I’m not going to lose my own house, and it’s not costing anything in mortgage payments. Thank God I made that seemingly “foolish” decision, all those years ago.
LOL! Now, if only She had been watching out over us when we jumped off the cliff to buy the downtown house.