My lender (USAA, my insurance company) approved the loan in about 48 hours, and most of that was taken up by my waiting for them to write some official request to me to send them a pay stub.
Now... I have excellent credit, and Beth's is even better than mine, but it seemed kind of amazing that my large-ass loan was approved. I think it's a reflection of my home being so well within my margin of error that it seems (and is) incredibly low risk. I have a low, fixed rate, a lot of income, yadda, yadda, yadda.
So I got over my weirdness in the face of the fact that I borrowed money against my house during the exact 96 hour-period of the most perilous moment our economy is experiencing, specifically about bad debt and lending in the last 100 years. Then I started to wonder if I was, as a big borrower right now, a part of the problem or a part of the solution. My brother answered this question perfectly. He said, "Hank Paulson believes that you are definitely part of the solution ,or you are definitely part of the problem."
That's exactly right.
3 comments:
First off, you are the safest credit risk of any person I can imagine. I suppose I don't actually have access to checkbook, but seriously, there are lots of country's more likely to default on a loan then you & Beth. (I'm just saying.)
Second, this does make me think the Great Depression may not be around the corner.
First, I thought Motorola was paying for your degree?
Second, You are part of the solution. You are not going to default, and as we recently discussed, loans are assets to banks (especially low-risk loans), so now USAA is stronger for your business. Also, you are, I assume, not taking out a loan in excess of your house's valuation, so you're not contributing to the housing bubble. Ans I assume that you are going to *do something* (what? BTW) with that cash other than buy magic beans, so you'll be injecting more activity into the economy.
Part of the problem right now is that there's limited credit, which is causing other business activity to dry up. You are a bright spot in a grim scene.
Motorola is paying or my degree, but as with anything it's complicated. Mot only pays me *back*. So I have to submit my grades to them, and if I get better than a B, they pay me back. So I have to come up with the whole amount (in increments of course). So I applied for student loans.
Student loans are annoyingly difficult to concentrate on, and I made the bad assumption that they were the lowest rate I could find. So now after a year I finally talked to my financial adviser and he pointed out that a home equity vehicle was much cheaper (and tax deductible), so I'm using this load to pay off the student loans. We may use them to re-do the kitchen at some point.
The other funny part is that while it's a 100% reimbursement from Motorola, technically it's an increase in salary, so I'm paying taxes on the increase in income.
It ends up being a substantial outlay of cash I won't get back.
So there you go.
And your description of why it is a benefit to the economy is correct, but not the whole story. I meant it when I said that even Paulson himself wouldn't be able to render a solid opinion.
I think a Great Depression is very potentially around the corner (over the cliff?).
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