Lesson One:
- Thread starter Big Don
- Start date
thardey
Master Black Belt
Geez.
We bought our home on the "rise" of the market a couple of years ago. Got a fixed rate. No question about that.
An acquaintance is a real estate agent, and I asked him to keep an eye out for any good deals for me. He asked what our loan was approved for, and I said about $220, enough for a descent starter home here at the time. He told me "Oh no! Don't do that -- you could get approved for at least $350! Here's what you do: Buy as high as you can, on an interest-only, adjustable loan. Then wait until the value rises, and sell it in two or three years, take the money you made, and buy a smaller home!"
I thought he was nuts. Turns out I was right. If I had done what he had suggested, I would be living in my car right now.
They can't con you if you don't get greedy!
We bought our home on the "rise" of the market a couple of years ago. Got a fixed rate. No question about that.
An acquaintance is a real estate agent, and I asked him to keep an eye out for any good deals for me. He asked what our loan was approved for, and I said about $220, enough for a descent starter home here at the time. He told me "Oh no! Don't do that -- you could get approved for at least $350! Here's what you do: Buy as high as you can, on an interest-only, adjustable loan. Then wait until the value rises, and sell it in two or three years, take the money you made, and buy a smaller home!"
I thought he was nuts. Turns out I was right. If I had done what he had suggested, I would be living in my car right now.
They can't con you if you don't get greedy!
Lessons 1 and 2 are sage advice. Lesson 3 isn't always true. I bought in '95, my ARM adjusted annually, the last two it adjusted down before I went to a fixed rate about 5 years ago. Actually, it had gone down to around 4% (below the initial rate by a few points) when I converted to the fixed at 5.625%.
It's all in the timing.:wink: Basic household finances should rule your life when it comes to buying a house. "Honey, can we afford it?" If the response is only if we win the freakin' lottery then don't buy it.
Flying Crane
Sr. Grandmaster
as well as "only if we eat Raman Noodles three times a day, never take a vacation again, and pray the roof never needs to be replaced", that's another indicator that you cannot afford it.
newGuy12
Master of Arts
That's so true. The "confidence man" cannot trick you if you are not greedy!
