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[101lifts2]

Originally Posted by Homeslice

How are you losing nothing? You paid closing costs on each home.

And BTW what if the market was on an upswing? Not only did you not build any equity, but the next home would be more expensive.

But it didn't...it took a DEEP dive. EVerything I "would" have put into the house would have been for nothing.

And if the market took an upswing, I would have sold it for a profit.

My co-worker bought a house for 630k and put 150k down. Thing is worth 380K, which is less than what he owes. Now...he is stuck with it or stands to loose 150k.

[goof2]

Originally Posted by Homeslice

How are you losing nothing? You paid closing costs on each home.

And BTW what if the market was on an upswing? Not only did you not build any equity, but the next home would be more expensive.

Factor in what would have otherwise been paid in rent and the deal should get to break even at least.

When the real estate market was really good people were able to accrue much more equity from increasing values than they did from the portion of their payment that went toward the loan principle. Of course it was also common to take out equity loans to buy crap so that equity often didn't stay with the house for very long.

[Captain Morgan]

Originally Posted by goof2

It is, but as I said in my above post they thought the house would continue to have big gains in value every year. They would make almost as much as the suckers with substantial down payments and (temporarily) higher fixed interest rates, only they would have extra money to fill the house with furniture and electronics (that they also bought on credit). As I said in my first post there was plenty of greed on both sides.

You and I are in total agreement

[Homeslice]

Originally Posted by 101lifts2

But it didn't...it took a DEEP dive. EVerything I "would" have put into the house would have been for nothing.

And if the market took an upswing, I would have sold it for a profit.

My co-worker bought a house for 630k and put 150k down. Thing is worth 380K, which is less than what he owes. Now...he is stuck with it or stands to loose 150k.

The point is, if this was a normal market, and homes were rising gradually, you're not going to score any kind of upgrade for nothing. Yes you might be able to sell your home for a profit, but the next home you buy is going to cost more than it did 5 years ago as well. Plus you were wasting all that money on interest payments (almost as much as rent, if not more). Plus closing costs. So um, I don't get how this interest-only stuff is so great. Maybe it lowers your payment a little, but in return it just means that you'll have more to pay off after you sell your home.

To me it's kind of like the chumps who take out a 72 month loan on their car, just so they can get a Lexus they otherwise couldn't afford.

[101lifts2]

Originally Posted by Homeslice

The point is, if this was a normal market, and homes were rising gradually, you're not going to score any kind of upgrade for nothing. Yes you might be able to sell your home for a profit, but the next home you buy is going to cost more than it did 5 years ago as well. Plus you were wasting all that money on interest payments (almost as much as rent, if not more). Plus closing costs. So um, I don't get how this interest-only stuff is so great. Maybe it lowers your payment a little, but in return it just means that you'll have more to pay off after you sell your home.

To me it's kind of like the chumps who take out a 72 month loan on their car, just so they can get a Lexus they otherwise couldn't afford.

I understand, but housing went way down and it's going to take 10 years for a house in the Inland Empire to go up to 2005 levels (if it ever does). For me anyway..I got real lucky to get outta this gem I had.

I would rather have an interest only payment that I can pay principle, but not have to be obligated to pay principle/interest in case of loss of work or a big expense as long as the interest rate is not higher than a 30yr fixed. As long as you make the principle payments, you are no different than the 30yr fixed loan.