Debt Dumpers 2020

[barkley]

My expectation is that they eventually go down to half those rates.

and to think my dh thought i was nuts 2 years ago to get six 5 year cd's that my credit union was offering w/a $500 opening balance/3% interest rate. i figured we had cd's that would be coming due over the 5 year period and if interest was a bit lower i could roll the money into those (they permit a capped monthly amount of additional deposits). now we couldn't get a cd for anywhere near that rate so the economy, for me, needs to straighten up sometime before october of 2023.

 

[RamblingMad]

and to think my dh thought i was nuts 2 years ago to get six 5 year cd's that my credit union was offering w/a $500 opening balance/3% interest rate. i figured we had cd's that would be coming due over the 5 year period and if interest was a bit lower i could roll the money into those (they permit a capped monthly amount of additional deposits). now we couldn't get a cd for anywhere near that rate so the economy, for me, needs to straighten up sometime before october of 2023.

Our forecasts look good for 2022.

 

[barkley]

Our forecasts look good for 2022.

cool. i can just plan on saving in the 3% cd's and if rates start to look better on them i can snag some/lock those rates and put in them what i put monthly into the 3%'rs now. i'm just thankful that these allow for additional monthly deposits vs. the cd's of my mom's era which were bought at a specific dollar amount w/no ability to further benefit from the locked in interest rate for the life of those individual cd's.

 

[RamblingMad]

cool. i can just plan on saving in the 3% cd's and if rates start to look better on them i can snag some/lock those rates and put in them what i put monthly into the 3%'rs now. i'm just thankful that these allow for additional monthly deposits vs. the cd's of my mom's era which were bought at a specific dollar amount w/no ability to further benefit from the locked in interest rate for the life of those individual cd's.

I’m not expecting rates to go up any time soon.

 

[barkley]

I’m not expecting rates to go up any time soon.

nor am i. i figure when the lenders can start acting on mortgage defaults the housing market is going to take a huge dive and the domino effect will keep rates low.

 

[RamblingMad]

nor am i. i figure when the lenders can start acting on mortgage defaults the housing market is going to take a huge dive and the domino effect will keep rates low.

I don’t think those are at all related. However, when foreclosures start to go up, you should expect housing prices to go down. Forbearance will only get us through the end of the year. Between this and no unemployment stimulus, I’m expecting a bad Q1.

 

[StacyStrong]

How do you guys manage paying down your debt given the uncertainty of COVID? This is where I’m struggling with this the most. Do I continue to pay down my home faster or hoard more cash? How are you guys thinking about this?

I still have student loans. My job is fairly secure, but I’ve been taking advantage of the no interest/no payment deal to put that money in a savings account instead of applying the funds to my loans. I’ve earmarked the money. If I still look good financially by the time I need to start paying loans again, I’ll just apply all of that money to the loan. If something happens, then I saved up quite a bit of extra “emergency” money that I can use if needed.

(student loans are my only debt)

 

[comicguy]

Capital One's online Performance savings accounts dropped from 1% to .8 yesterday as well

 

[huggybuff]

I know it's mainly money saving on the board, but is anyone else planning to get Mulan next month on Disney Plus? I am.

Nope. It's not even the cost, TBH. It looks good but I have so many things to watch that I figure Mulan can wait until it's no longer premium on Disney+. I'm someone who's missing the whole movie theater experience even though we don't go much. I'd be more apt to see it in the theater than pay a premium at home. I'm probably the opposite of most people in that regard.

 

[jen7233]

Nope. It's not even the cost, TBH. It looks good but I have so many things to watch that I figure Mulan can wait until it's no longer premium on Disney+. I'm someone who's missing the whole movie theater experience even though we don't go much. I'd be more apt to see it in the theater than pay a premium at home. I'm probably the opposite of most people in that regard.

I am that way with most the premium offerings, I skip out and wait it out for free. However, I had a few things on my list I've been waiting to see. Mulan, Black Widow, and Quiet Place 2. I would also pay premium to watch the Mike Tyson fight, if he does indeed fight.

My DD absolutely misses the whole movie theater going experience, so I can understand some just miss it. My younger ones still living at home don't care at all about the theater, and rather watch shows on iPads, whatever is on the streaming apps free typically. I saw some little meme the other day, "yes, I miss my $100 movie theater visit right about now", that's about what we end up doing for all of us, unless we go super cheap and cut the snacks!

 

[RamblingMad]

Nope. It's not even the cost, TBH. It looks good but I have so many things to watch that I figure Mulan can wait until it's no longer premium on Disney+. I'm someone who's missing the whole movie theater experience even though we don't go much. I'd be more apt to see it in the theater than pay a premium at home. I'm probably the opposite of most people in that regard.

Yep. Disney+ doesn’t have enough new content yet for me to subscribe yet.

 

[barkley]

I don’t think those are at all related. However, when foreclosures start to go up, you should expect housing prices to go down. Forbearance will only get us through the end of the year. Between this and no unemployment stimulus, I’m expecting a bad Q1.

i see the two interrelated. when the housing bubble burst the last time it had a horrendous impact on the economy. this time i feel that the impact may be far greater. the bulk of the loans that many lenders are doing these days are mortgages and construction (why finance a car when manufacturers are offering 7 year/no interest, no one is really looking for new business start up monies). the bulk of the construction loans were secured pre pandemic (at least in our neck of the woods b/c of our pre pandemic ranking in the top 3 hottest nationwide housing markets). all that construction got shut down and now everyone is racing to finish it BUT we will have factors that impact purchases/rentals down the line ultimately impacting repayment of those loans-

a glut of bank repo homes when people who have taken full advantage of forbearance are either put out or just walk away. a glut of repos due to the number of double income households that are now becoming single b/c one parent needs to stay home with school aged kids. an excess of new construction-what used to be desirable multiple family dwellings that people are steering away from due to close proximity covid fears, and finaly-rental investment properties that landlords have not received rent on for months/won't see for months (if ever).

a glut of existing and new construction apartments that were largely rented by college students or younger employees that even now sit highly vacant b/c of the mass returns home to parents due to distance college classes or job elimination.

when the bulk of a lender's income is reliant on housing or the construction of housing a downturn in that market may spark a buying frenzy for those who were previously priced out but with interest rates at an all time low already i don't think it will offset the losses.

 

[RamblingMad]

i see the two interrelated. when the housing bubble burst the last time it had a horrendous impact on the economy. this time i feel that the impact may be far greater. the bulk of the loans that many lenders are doing these days are mortgages and construction (why finance a car when manufacturers are offering 7 year/no interest, no one is really looking for new business start up monies). the bulk of the construction loans were secured pre pandemic (at least in our neck of the woods b/c of our pre pandemic ranking in the top 3 hottest nationwide housing markets). all that construction got shut down and now everyone is racing to finish it BUT we will have factors that impact purchases/rentals down the line ultimately impacting repayment of those loans-

a glut of bank repo homes when people who have taken full advantage of forbearance are either put out or just walk away. a glut of repos due to the number of double income households that are now becoming single b/c one parent needs to stay home with school aged kids. an excess of new construction-what used to be desirable multiple family dwellings that people are steering away from due to close proximity covid fears, and finaly-rental investment properties that landlords have not received rent on for months/won't see for months (if ever).

a glut of existing and new construction apartments that were largely rented by college students or younger employees that even now sit highly vacant b/c of the mass returns home to parents due to distance college classes or job elimination.

when the bulk of a lender's income is reliant on housing or the construction of housing a downturn in that market may spark a buying frenzy for those who were previously priced out but with interest rates at an all time low already i don't think it will offset the losses.

But for that to happen the economic effect has to spread across the income levels. Right now it’s heavily concentrated in the $45k and less income bracket. It’s not distributed across all of them. The effect of no unemployment stimulus on consumer spending should change this story. But we should be good to get through 2020.

There is still a lot of demand for near zero treasuries. I don’t see rates going up anytime soon with the Fed’s buying programs in full swing.

 

[DLgal]

i see the two interrelated. when the housing bubble burst the last time it had a horrendous impact on the economy. this time i feel that the impact may be far greater. the bulk of the loans that many lenders are doing these days are mortgages and construction (why finance a car when manufacturers are offering 7 year/no interest, no one is really looking for new business start up monies). the bulk of the construction loans were secured pre pandemic (at least in our neck of the woods b/c of our pre pandemic ranking in the top 3 hottest nationwide housing markets). all that construction got shut down and now everyone is racing to finish it BUT we will have factors that impact purchases/rentals down the line ultimately impacting repayment of those loans-

a glut of bank repo homes when people who have taken full advantage of forbearance are either put out or just walk away. a glut of repos due to the number of double income households that are now becoming single b/c one parent needs to stay home with school aged kids. an excess of new construction-what used to be desirable multiple family dwellings that people are steering away from due to close proximity covid fears, and finaly-rental investment properties that landlords have not received rent on for months/won't see for months (if ever).

a glut of existing and new construction apartments that were largely rented by college students or younger employees that even now sit highly vacant b/c of the mass returns home to parents due to distance college classes or job elimination.

when the bulk of a lender's income is reliant on housing or the construction of housing a downturn in that market may spark a buying frenzy for those who were previously priced out but with interest rates at an all time low already i don't think it will offset the losses.

The major difference is that the 2008 economic crisis was fueled entirely by the housing market subprime loan fiasco. It was the what caused the whole thing in the first place.

This situation is one where the housing market will suffer as a byproduct of the larger picture of income loss due to the virus.

 

[Shelly F - Ohio]

and to think my dh thought i was nuts 2 years ago to get six 5 year cd's that my credit union was offering w/a $500 opening balance/3% interest rate. i figured we had cd's that would be coming due over the 5 year period and if interest was a bit lower i could roll the money into those (they permit a capped monthly amount of additional deposits). now we couldn't get a cd for anywhere near that rate so the economy, for me, needs to straighten up sometime before october of 2023.

Yes I wish last year we would have taken out more CD for the 3.70% rate but happy with the 3 we did get. I use to work in a bank in the early 90's and I was in charge of changing the CD rate board. Back in those days the rate was 11%. Oh how I would love to see those rates again.

 

[barkley]

But for that to happen the economic effect has to spread across the income levels. Right now it’s heavily concentrated in the $45k and less income bracket. It’s not distributed across all of them. The effect of no unemployment stimulus on consumer spending should change this story. But we should be good to get through 2020.

There is still a lot of demand for near zero treasuries. I don’t see rates going up anytime soon with the Fed’s buying programs in full swing.

i know ALLOT of people with incomes brackets of 75K and well above that have/continue to be significantly impacted. not all employers switched to remote, not all professions lent to being done remotely and those $600 uib supplemental weekly payments came nowhere near replacing their lost earnings. a number of insanely well paying professions in the medical field have been decimated due to mass hospital layoffs due to elimination of money generating elective procedures. college professors and management staff who are being eliminated/layed off due to diminished enrollments, business owners who tried to stay afloat but when they reopened only to be shut down again have had to fold permanently, business and residential property owners who were reliant on rental income and haven't received any in months...the list goes on and on and will only get worse as record numbers of well paid teachers are forced to resign over health concerns/lack of childcare for their own kids whose districts have opted not to have in person, dual income parent households shift to single income...

i think the extent of the economic impact of the current situation has yet to be revealed but soon will b/c allot of people are just at the end of the 6 month emergency fund they ideally had in place and many retired americans who previously relied on interest income to supplement their pensions/ss have dug DEEP into their principal savings to compensate for rising food and other necessity costs.

 

[barkley]

Yes I wish last year we would have taken out more CD for the 3.70% rate but happy with the 3 we did get. I use to work in a bank in the early 90's and I was in charge of changing the CD rate board. Back in those days the rate was 11%. Oh how I would love to see those rates again.

i remember in the 80's when my mom was getting 17 or 18% on hers no wonder why she didn't want to pay off the remainder of her mortgage-she was earning more than she would have saved.

 

[RamblingMad]

i know ALLOT of people with incomes brackets of 75K and well above that have/continue to be significantly impacted. not all employers switched to remote, not all professions lent to being done remotely and those $600 uib supplemental weekly payments came nowhere near replacing their lost earnings. a number of insanely well paying professions in the medical field have been decimated due to mass hospital layoffs due to elimination of money generating elective procedures. college professors and management staff who are being eliminated/layed off due to diminished enrollments, business owners who tried to stay afloat but when they reopened only to be shut down again have had to fold permanently, business and residential property owners who were reliant on rental income and haven't received any in months...the list goes on and on and will only get worse as record numbers of well paid teachers are forced to resign over health concerns/lack of childcare for their own kids whose districts have opted not to have in person, dual income parent households shift to single income...

i think the extent of the economic impact of the current situation has yet to be revealed but soon will b/c allot of people are just at the end of the 6 month emergency fund they ideally had in place and many retired americans who previously relied on interest income to supplement their pensions/ss have dug DEEP into their principal savings to compensate for rising food and other necessity costs.

Recent surveys by the Fed showed that most people had less than $500 in savings last year. Most people don’t have 6 month in emergency savings.

There are higher income people impacted. But the distribution is nowhere near evenly distributed.

 

[Shelly F - Ohio]

The major difference is that the 2008 economic crisis was fueled entirely by the housing market subprime loan fiasco. It was the what caused the whole thing in the first place.

This situation is one where the housing market will suffer as a byproduct of the larger picture of income loss due to the virus.

Though you would not know it today with all the house sales and refy's everyone is doing. Hubby works for a mortgage company and they are so swamped with loan applications. THey have did 10 billion dollars in loans in 1 month when their rate dipped to 1.89% They have plans to hire 10,000 more people this year to keep up on demand. Niece is a realtor she has more customers than she has houses because as soon as the hit the market the are sold.

 

[pblack]

Mid-August update - I'm honestly not sure what my last update was and i'm too lazy to go find it lol. I had pretty much met all of my original goals for this year, so this will just be an update on my "new" goals.

• Save an additional $1000 towards emergency fund....have currently saved $450, so only $550 to go which will easily be met by the end of the year.
• Increase retirement contributions for DH and I.....I think i'm just putting this off for this year. I want to try and throw more money to my savings. I was going to increase DH's if he received a raise, but he has not as of yet. My raise should kick in with the paycheck at the end of the month. I am still debating upping my 403B by another $25, but we will see.
• Pay an extra $500 towards highlander loan....not sure if I will hit $500 or not. I'm not gonna beat myself up to bad about it if I don't get there.

I also don't remember if I mentioned that we recently replaced our 30+ year old hand me down stand up freezer with a new one. (The old one still worked, but probably not as well as it should have. We ended up giving it to my SIL since they were unable to find a freezer.) I put the new freezer on our Best Buy card. It came out to $758 and this should be paid off by the beginning of October. But in case something crazy happens it is on 0% interest until Feb 2022. I can't wait to see how much this might affect our electric bill since this one is definitely more energy efficient.

I've finally finished painting my bedroom and putting everything back together. I had to remove a "vent" that either the flippers or original home owner put in, but it served absolutely no purpose. Someone punched a hole in the drywall, nailed a vent over it, and then painted over the vent. Like seriously, what's the point?! I still have to take down the one in the bathroom and patch it as well. We don't have an a/c vent in our master bathroom (which is why i'm thinking they "tried" to make up for it with the hole in the drywall) and i'm waiting on the weather to be cooler so my brother can come back over and put in a vent for us. I think my next home project is going to be re-painting our spare bedroom, which I should hopefully be able to do in one shot unlike our bedroom.

We're in for a heatwave over the next week. Today we're supposed to be around 109 and thats about the average for the next week. My pool will definitely be getting some use this weekend!