new home mortgage linked to checking account

[movie zombie]

http://edit.store.yahoo.com/lib/realityzone/UFNEquityAlteringSpending.mht

there''s a new home mortgage which is linked to your checking account. my husband says they have this in australia.....and that its a very good tool for rich people. in effect, you have access to the principal as a savings account if you need it, but your principal is reduced while it is there. you save lots of $$$$ in interest and earn more due to the tax advantage than if the money was in some types of savings instruments and/or some stocks. however, his family who i might add are not rich have abused this type of loan by using it to live beyond their means and filed more refi''s to avoid bankruptcy [again] than i can shake a stick at. this type of loan would require very good money management skills, imo. but in reading the article, it is clear that there are two camps regarding what good money management skills are.......

i was astounded to see a reference to our town, boulder creek, in this article!

peace, movie zombie

 

[Dancing Fire]

it took the experts this long to figure out?

i said long time ago the US economic growth in the pass few years is due to refi''s. what people don''t realize is that being able to buy something is different from being able to afford it.yes,i can go out and buy a new $100k mercerdes but in reality i can''t afford it. equity isn''t real money.

 

[Sparkster]

Date: 9/4/2005 2:34:15 PM
Author: Dancing Fire
it took the experts this long to figure out?

i said long time ago the US economic growth in the pass few years is due to refi''s. what people don''t realize is that being able to buy something is different from being able to afford it.yes,i can go out and buy a new $100k mercerdes but in reality i can''t afford it. equity isn''t real money.

You are so right. So many people live beyond their means. I remember when we were shopping around for mortgages, one bank told us that based on our combined incomes, we could borrow $1.2 million. Yeah - right, and eat grass for the rest of our lives because we wouldn''t be able to afford food.

I must admit though that we took out a higher mortgage than what was necessary to settle the house. We needed new furniture and intereset rates for the mortgage was much lower than a personal loan.

What we also do is have a mortgage offset account. If we put $10,000 savings into the account then the bank takes this as being a $10,000 mortgage payment - the good thing is that any money in the account is at call.