Posted on 08/21/2007 8:18:53 AM PDT by Hydroshock
Two years ago, my wife and I sat at a long conference table in a mortgage-title office in Bethesda. Sitting next to us: our real estate agent, who drew up our bid on a townhouse in Germantown two days after showing it to us. We didn't get an inspection, and I don't recall going back for a second look. We had to act fast or someone else would get it.
Our bid won the house -- our very own first home -- and now we had to close the deal. The owners sat across the table. They seemed more nervous than we did, perhaps fearing we would have second thoughts -- about our risky interest-only mortgage, about seeing them walk away with a $120,000 profit, about buying a house just as "bubble" was entering the regional lexicon.
They signed. We signed. Price tag: $459,275.
And then, as the saying sort of goes, the stuff hit the fan. The sizzling home market almost immediately began to cool off, which my wife and I sort of ignored. Interest rates started to creep up, and we sort of blew that off, too. We have time. This too shall pass. No worries. Life is good! We bought a flat-panel television, took a nice vacation, bought a dog, hired him a daily dog-walker, and then we got pregnant. We have time. This too shall pass.
(Excerpt) Read more at washingtonpost.com ...
Two years ago, my wife and I sat at a long conference table in a mortgage-title office in Bethesda. Sitting next to us: our real estate agent,
Where was their lawyer? The conference table certainly would have been long enough. Oh, that's right. Why spend $300 on a lawyer when you're only spending half a million dollars. Besides, they had "our real estate agent" with them to advise them.
Dave Ramsey would eat these people alive.....
Obviously their RE agent has no soul. Even though present at the table, she did not deign to help her clients with the docs or **gasp** tell them not to proceed without counsel.
Let’s not pick on the dog walker. That could be a teen making a few bucks. I support working teens.
::just saying::
The article intermingles the use of interest only with adjustable rate. Not always the same thing.
There are several reasons why a smart investor would pay interest only. Your question indicates you don’t know any of them.
Do you have a “deep in debt” ping list? If so, please add me.
Sorry I don’t.
Yes it was a mistake.
While its true the writer may still come out ahead, if interest rates fall and home prices go up before 2010, it was still a mistake because he gambled with this asset.
If he lucks out, it does not make it any less of a mistake.
“There are several reasons why a smart investor would pay interest only. Your question indicates you dont know any of them.”
Yes, that’s right newbie. I don’t know anything but some know it all like you will set me straight.
How long do I have to be here to be as smart as you?
“It was obvious from your remark that it was an over generalization and you are unaware of the various types of investors who would do exactly as you said no one should and for good reason.”
You are right, I am unaware of the various types of investors. That is why my posting was stated as a question. Instead of replying with some answers as to why a smart investor would pay interest only, your response was to tell me that I didn’t know anything. Thanks for the help.
It’s obvious that you already know more than me, so the length of time here is irrelevant.
Have a good one!
“I get paid to answer that question.”
Ah, I see how this works! You got me there.
Best wishes!
This is confusing. How is this considered income?
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