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Housebuilding tips, Issue #005-Subprime is bad!
July 12, 2007
Dear Friends

Subprime is bad!

July 2007

I apologize for missing three months of newsletters. I had a heart attack in the spring, followed by heart surgery. My doctors advised me to de-stress my life, so I took three months off to realign my perspectives.

I’m 45 years old and am in fairly good shape, but this is an indicator of the levels of stress we all feel in our day and age and we all need to de-stress our lives or suffer the consequences.

Anyway, I am back and feeling good.

It doesn’t matter who we are, we all have unforeseeable events in our lives that change everything. This event could be financially devastating to some, but fortunately for my wife and I, the money we was able to save years ago by building our own home has helped us create a strong financial position to help us ride out the problems of life.

More now than ever, do I trust in the advice from my mentors and examples about adding equity to your home by doing the work yourself.

We are living in some very strange times where banks are lending up to 130% of the value of homes. This is scary to me. When banks overextend themselves to make loans of that type, the results are eventually what we saw back in the 1920’s during the great depression.

People with average incomes can finance extravagant homes with no down payment. We have all learned a new word recently, it’s called, “sub-prime” loans. This is a dirty word to me. People are losing their homes after just 6 months of buying. This is not good for anyone at all. Everybody loses out on these types of loans.

The planning and zoning commissions everywhere are making this problem worse. While they try to do a good job, they are mostly just a bunch of beaurocrats who are doing more harm than good. They enable contractors to charge high prices for labor performed and we the homeowners are having to pay the price.

They are just trying to create jobs for themselves so they can stay employed. The problem will get worse before it gets better, but we can still do a lot of our own building in most cases.

The price of building materials is still low and it looks as if it will stay that way for awhile. Now is a great time to build your own home.

If you don’t have the funds, but really want to start planning your home project, draw up some house plans and make them come alive in your mind. Visualize every square foot in your new home. This does two things to help you get into your new home sooner. First, it makes a solid house plan that you can use to realize your goals of becoming a homeowner, but secondly and more importantly, it starts your mind down a path that forces you to make your dreams a reality.

I truly believe that we need to create a strong amount of equity in our homes so we can have more security in our lives. The world is a difficult place to live in. These people that utilize sub-prime loans to reach their goals of homeownership often end up disillusioned in the system.

I feel for them because I know of a better way to do things. I have seen many homeowners settle and move on because of poor financing decisions.

We do what we can for ourselves in a difficult world. Sometimes we need to sort out the good from the bad. I hope that I can help people in their quest to become more financially stable and content in their lives.

Have fun with life.

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