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Not all of today's surprises are welcome

January 7th, 2014 at 11:08 pm

First: I am pretty happy about Team Canada's men's hockey roster. Surprised three players didn't make it, and that one person did, even though he is on one of my favourite teams.

The financial surprise:

Text is FRED graph and Link is http://research.stlouisfed.org/fred2/graph/?id=HOEREPHRE
FRED graph showing the average homeowner's equity as a percentage of household real estate. Look where the percentage was fifteen years ago. Look where it is now. The average mortgage interest rate was 6.75% for a 30-year term fifteen years ago, now it is 4.53%. You'd think by now the equity would be back up, even without homes reattaining the equity hills of 2006-2008.

I saw on Twitter a link to an article "I Don't Want to Pay Down My Debt" and that's how I feel. I don't want to keep my numbers, but refinancing is not a good option for any of my debts. I told my friend attending debt group was a pointless endeavour, and even eats into my savings challenge. She did approve of the Saving Challenge I'm undertaking this year.

It just occurred to me that if something weird happens, like a phone call from Culver City inviting me down for a day or two, I'd want some savings available for that. $1378 is more than ample for a one-way flight to LA, discount hotel stay w/breakfast voucher, and cab rides, plus a flight back. Maybe $378 is enough for all that, plus a latte or a lunch at a diner.

1 Responses to “Not all of today's surprises are welcome”

  1. snafu Says:
    1389166165

    I'm guessing a lot of the loss in home owner's equity revolves around mortgage amortization tables. I my parent's era the mortgage schedule stayed the same for 30 yrs. In my era the mortgage was renewed every 5 years, re-setting the table. Until the recent change, people were able to buy with 5% downpayment as opposed to 20% down payment. For a number of years people are borrowing against equity as a Line of Credit.

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