Posted on 12/04/2006 1:47:48 PM PST by RobRoy
If you worry about hyperinflation think what your dollars saved will be worth vs that 500k house. Myself I feel comfortable locking into 5 1/2% rates for 30 years. your rent also pays the taxes and makes your landlord a couple bucks too. God bless America. I love people like you.
Interest-only mortgages make sense only for real estate flippers who are near certain the house will appreciate in the future as it has in the past, so it can be sold later at profit.
For folks doing an interest-only now, at least here in Calif, where fixerupper dumps start around $500k, they should instead continue to rent.
Housing here is in an upwards spike and spikes, at least in pps of stocks, sooner or later fall back down.
Rent now. Wait for the next recession and buy a lot lower.
Another factor that is going to provide a double whammy out here is that the tax bills are about to go out, and the average residential assessment increased here on 113,000 homes an average of 30%. Last year that same group went up an average of 15%.
Climbing taxes from extreme reassessments adds another monthly increase to mortgage payments, at least for those who pay taxes via an escrow account.
Couldn't fit that 55 inch tv in a smaller house is my guess.
>>Not having an income would sink anyone. 30-40% of the country's working population would be in serious trouble not getting the 2nd check in any given month.<<
Yep. And a lot of economists and politicians are expressing concern over that exact problem. I have known plenty of people in my life that have lost jobs, yet did not lose their homes. There has been a fundamental shift in the way americans manage their money. As long as the pyramid scheme has not hit it's peak, everyone is just fine. But when it does, and it has, things will get a little dicey, nationally. Just how dicey remains to be seen.
My brother refinances every chance he gets. He then invests ALL the money he gets out. He believes you should have as little equity in your home as possible at all times.
If things get bad, you simply walk away, and take your investments with you. And he has absolutely no problem with that.
He is a licensed securities broker.
"When we looked for our first house we dumped our realtor because she only showed us homes that were above our price range."
Same thing happened to me when I was buying my first home. The Realtor even referred to my wife and I as "the emerging elite!" What a con artisit!
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