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June 10, 2011
Topsy-Turvy, But Not Upside-Down
Well, it's that time of year again. Time for the county to tell me what it thinks my house is worth and how much they plan to charge me for property taxes. According to the county, the land value of my property didn't change at all from last year, but the value of improvements (i.e. my house) dropped $5,600.

Now, I am quite certain if my house were gone and I was trying to sell just my lot, I wouldn't get even half of what the county says it's worth. On the flipside, there is no way I could rebuild my house for what the county says it's worth. So I guess it's a wash. However:

Based on what I paid for my house in 2004, and adding the cost of improvements we've made to the house since then, I am now topsy-turvy based on this year's tax assessment. This means I've dropped more money into the place than I could sell it for. It does NOT mean, however, that I am upside-down on the property.

Why? Because I put a substantial down payment on the house when I bought it. When times were good, I paid down the principal balance in fairly sizable chunks. I finished our basement by paying cash, not by financing it. You know, all the things the majority of homeowners truly underwater on their mortgages DIDN'T do.

I read an article this morning about homeowners (who are more appropriately defined as squatters) who haven't made payments on their mortgages for years. These squatters cry about being forced into bad loans (which they still signed), not being able to afford the payments, or owing far more than the property is worth. At the same time they are asking for our sympathy, we find they refinanced two or three times in the boom and used the cash for cars, vacations, attorneys to contest the foreclosure proceedings, and loose women. (OK, I made that last part up, but it sounded good.)

Now, I won't judge (OK, I will, but I'll keep my thoughts to myself), but I will give credit where credit is due. Thanks to my parents (who just celebrated 50 years of marriage, by the way), I learned financial discipline and the willpower to say 'no' to shiny new things until I had the money to afford them.

Yes, my shiny new home is losing its luster. Yes, I would be foolish to try and sell it right now. Yes, I will continue to pay my taxes, my insurance, AND my mortgage payments. But I have a roof over my head, a place for my family to call home, and a yard to take up all my time on the weekends. And that, my friends, is all I need.

Make it a great week,

Clint


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