What Do I Invest In Now USDA Loans-Are they at it again!!
Yes. Wait a minute, did you say USDA? As in, United States Department of Agriculture? We’ve heard of USDA Prime Steaks, but USDA Sub-Prime Loans? What ever the case may be?
We’re talking about a previously almost unknown and little-used program founded in 1949 to encourage the expansion and sales of homes in mostly rural parts of the country by, see if this sounds familiar, not requiring any down payment on the loan.
Just like the “low-doc” and “no-doc” and “interest only” loans of the mid-2000s, over which we still have menacing problems and which have certainly contributed to the record number of foreclosures we’re seeing, any loan which requires no down payment means nothing at risk for the borrower except the possibility of bankruptcy or having a foreclosure on their record, and lots of people don’t know how bad those can be unless they’ve been through it.
{When the program was first founded it made a lot of sense, but even in the current market, where lots of plans to increase business by not requiring down payments has all but completely blown up in the past two years, this program was bound to be discovered and amplified in a way that was never intended, so that since we began the financial crisis which seems to be trying to end, the program has attracted interest way beyond what it ever had before. Through September of this year, we’re looking at almost four times the number of USDA-guaranteed loans than were approved for all of 2007}.
What does it all mean? PLEASE DON’T DO IT! Yes, I know, if you live in an expensive part of the country it takes forever to save up a down payment. If you go bankrupt, it takes ten years before that’s no longer on your record, too.
That’s all you need to identify on the subject of USDA loans. Instead, decide right now to live within your means, which includes saving and investing 20% of your gross income in a combination of your 401K and other market investments, some of which might eventually be in real estate investments if they are appropriate for you.
An Example of that may sound something like this: “I’m a long-term investor. The stock portion of my portfolio is spread over several mutual funds, a few ETFs and a few individual stocks. Each and every one of these holdings was carefully chosen, after thorough research. I believe in these stocks and funds. I consider them as my best bet in growing my money – LONG TERM”.
If your income is not enough, please be patient. Good investing will never feel like gambling. Too bad that doesn’t make for a very good movie!
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