All Forum Posts by: Jim Macedon

So essentially you acknowledge that from a math standpoint, you lose money by paying X amount towards a HELOC every month instead of just paying the exact same amount per month towards your principal. But you argue for the psychological effect of enforcing discipline by making this a bill you have to pay every month, even though it is less efficient.

To that I would reply that if someone has a problem with discipline, the last thing they need is more debt at a higher interest rate.

Shrug, I've gotten my earnest money back every time. That seems more profitable than letting someone take it when TREC has made clear what the proper procedure is.

True, that's a calculation everyone has to make for themselves.  But in the situations I've had, the mere threat of bringing the attorneys into it--or in one case having the attorney write them a letter--resolved the issue pretty fast.  And I think establishing yourself as someone that doesn't lie down makes it a lot less likely that people will attempt to take advantage of you in the future.  That's just my style and philosophy.  Everyone has their own way of doing things.  I don't advocate being a jerk of course, but I do advocate presenting yourself as formidable.

Then you take them to court.

I've been through a similar situation.  If you used the standard TREC sales contract, it clearly lays out the terms for the release of earnest money.  Either you both sign a release OR one side can demand a release from the title company, and if the other side doesn't object within 15 days, the title company is supposed to release the money.  Point out the wording in the contract to the title company, and inform them that you are demanding a release of earnest money.  If they act like they're not going to adhere to the contract, you need to get your attorney involved.

If I were you, I would make every effort to get your girlfriend to sell the property.  The fact that her first instinct was to uncritically accept this "deal" means she should not be a landlord.  She is going to lose all her money and damage her family relationships with this course of action.

My post was in reference to timing. You want to buy low, so if you're sure that your area has a fairly predictable and extreme boom-bust cycle, it seems logical to wait for a bust to buy.

If your market is certain to bust in the foreseeable future, why would you buy now?  I don't generally advocate waiting around for a downturn, but your case seems unique.

In case you skipped to the last page and need a summary of this entire thread, here it is:

"You can pay off your mortgage fast.  Just get a line of credit for a higher interest rate and use it to pay off your mortgage!"

"Wait, what?  How could you possibly come out ahead by paying off a lower interest rate loan with a higher interest rate loan?"

"It works, you just don't understand it."

"Okay, please explain how it works."

"Look, moron, it's very simple.  If you are too stupid to understand it, that's not my problem."

"Okay, if it's that simple, you should have no problem explaining how it works."

"I can't explain how it works, it just does."

Then this cycle repeated itself about 25 times.

I don't want to stray into troll territory here, but come on, this is comical after a while.  10 pages later the acolytes of velocity banking still keep posting that we all lack understanding of the concept, yet they still--10 pages later--have yet to explain how taking out a loan for a higher interest rate to pay off another loan with a lower interest rate makes sense.