On Fri, 21 Jan 2005 10:18:50 -0600, Deanna Schneider <[EMAIL PROTECTED]> wrote: > But, even if the market is appreciating, if you can't afford the > larger payment that still means you are going to _have to sell_ when > the principal payments come due.
true...but most people who take interest only loans are only planning on staying in the place for the short term (as Michael said he's planning on doing...same thing with my sister...she's only planning on staying in her new place for a few years). I agree that it's not a (good) option for people who plan to lay roots. You -don't- want to be there when the principal payments come. >I'm not saying you shouldn't do it - > only you know if you're going to want to sell at that point. But, the > fact that the house is worth more doesn't suddenly make what you owe > on the house any less. Okay, so you could refinance at that point, > perhaps. But, what will that buy you? More closing costs and > prolonging the debt by another 5 years again. No, you don't owe any less, but you have equity (again, assuming the house has appreciated). the principal was based on the original purchase price. now the house is worth...say...$30k more. Well, you sell it and pay off that original principal and after closing costs, you've got a few bucks in your pocket. Could be the down payment towards the next place where you -do- plan on staying long term :) > Can you tell I'm fiscally conservative? I figure if you can't afford > the house, you shouldn't be buying it. I don't disagree with that at all. When I saw that my buyer was financing 100% of the loan, all I could think about was how high the monthly payment was going to be, and whether or not he really knew what he was doing. Sometimes people get overwhelmed at the thought of buying a house...or maybe overemotional would be a better term. They're so excited to 'just get in' that they don't see the forest through the trees and realize that they're committing themselves to a payment they can't afford. ...and for clarification...I'm not saying that's the case with Mr. T here. I believe we've digressed a bit from his original question :) -- Charlie Griefer ================================================ Marta was watching the football game with me when she said, "You know, most of these sports are based on the idea of one group protecting its territory from invasion by another group." "Yeah," I said, trying not to laugh. Girls are funny. ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~| Find out how CFTicket can increase your company's customer support efficiency by 100% http://www.houseoffusion.com/banners/view.cfm?bannerid=49 Message: http://www.houseoffusion.com/lists.cfm/link=i:5:143764 Archives: http://www.houseoffusion.com/cf_lists/threads.cfm/5 Subscription: http://www.houseoffusion.com/lists.cfm/link=s:5 Unsubscribe: http://www.houseoffusion.com/cf_lists/unsubscribe.cfm?user=89.70.5 Donations & Support: http://www.houseoffusion.com/tiny.cfm/54
