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Thread: Home Financing questions?

  1. #1
    Speedin' Ian
    So I am getting ready to buy my first home and I am a little over whelmed with all my options (neg am, fixed, interest only, options,etc...). So what are those that have bought new houses doing?
    Interest only or even neg. am seems great if houses continue to appreciate at a moderate rate, but your pretty much screwed if the market takes a dump. Then again when median home prices are close to 700,000.00 in Ventura County so what options do you have? Also do you guys think it is better to finance as much as possible or put as much down as possible? I like the idea of keeping some money in the bank after I move in. Any suggestions?

  2. #2
    Phat Matt
    How long do you plan on living there?

  3. #3
    HM
    You've got pm.

  4. #4
    Nord
    I bought my house 3 years ago. Everyone will offer you a low interest rate, but usually when they are really low, they are adjustable. Don't buy adjustable, I don't care what anyone says. Get like a 5 to 7% 30 year, and don't refinance if you don't have to. Just pay the MO FO off! Remember, when you refinance, you are borrowing against equity, and you will just owe more. When you sell, this refinance has to be paid off too! I opened up a equity line about a year ago and haven't used it, but when I do, its tax deductable so I can use it to pay off credit cards and shit! :idea:

  5. #5
    Mandelon
    Some folks say you should use your house like a financial tool. Borrow against it, reinvest that money, or put very little down, go interest only or negative amortization, some loans have an option of which type of payment you want to make every single month!
    Others know they can't be trusted with any extra money, if its not used on the house it will get spent and not saved. There are formulas and tables that will show you to use the least amount of money on your house and invest the rest. But right now there aren't many "safe" investments that will guarantee you more than 5%......junk bonds, second trust deeds, yes, but not a CD or savings bond. The stock market returns arond 10% over the long haul but hasn't done that regularly for a while.
    It depends on you. Are you a risk taker? Are you a disciplined saver? Do you want to stay in this house until they carry out your body?
    I'm not moving from my current house. The property taxes would kill me! I have a fixed on my residence with a 100K equity line. The rental apartments I plan to keep are fixed. Anything I plan to sell I get the cheapest rate I can.
    If you will be moving in only a few years I'd say go interest only or an adjustable rate. Short term they make sense. You will be $$$ ahead. You can always pay down extra equity if you want. One extra payment a year will save you tens of thousands over time and shave off years from the balance.

  6. #6
    Dave C
    if you plan on moving get a 5/1 ARM.
    If you plan on staying get a 30 year fixed.
    Its generally OK to start with an ARM because you can borrow more (i.e. get more) cuz of the lower rate. You can buy more house than you can under a fixed. Then refinance to a fixed rate down the road when you can afford it.
    The down is tricky.. put as much as is necessary to qualify and then keep the rest for repairs especially if you are buying a "used" (abused) house.
    Don't wait... its a good investment.

  7. #7
    locogringo
    what Mandelon said to a t. Weigh your options, decide how savvy of a saver you are, and go from there. We see bout 65-70% of the loans done at an adjustable payment not a fixed. Says something about the people but an issue that is going to be a problem in the near future fo many!

  8. #8
    cdog
    Take this for what it's worth, i'm in the business as a realtor and I would suggest a 5 or 10 year intrest only loan. You will by all odds sell within 4-7 years and move up or out of the area. You always have to option to pay down the loan as you wish. Meanwhile enjoy a more comfortable payment and use your home as a excellent tax shelter. If you have a decent income and and need write offs it's the only way to go so don't plan on ever paying off you home untill you are close to retirement and even then if your playing some stocks it'll be nice to have tax shelters.. A wise man once said "It's not what you make, It's what you keep"...

  9. #9
    Restless22
    if you plan on moving get a 5/1 ARM.
    If you plan on staying get a 30 year fixed.
    Its generally OK to start with an ARM because you can borrow more (i.e. get more) cuz of the lower rate. You can buy more house than you can under a fixed. Then refinance to a fixed rate down the road when you can afford it.
    The down is tricky.. put as much as is necessary to qualify and then keep the rest for repairs especially if you are buying a "used" (abused) house.
    Don't wait... its a good investment.
    Well said Mr. C

  10. #10
    wantacat
    if you plan on moving get a 5/1 ARM.
    If you plan on staying get a 30 year fixed.
    Its generally OK to start with an ARM because you can borrow more (i.e. get more) cuz of the lower rate. You can buy more house than you can under a fixed. Then refinance to a fixed rate down the road when you can afford it.
    The down is tricky.. put as much as is necessary to qualify and then keep the rest for repairs especially if you are buying a "used" (abused) house.
    Don't wait... its a good investment.
    Exactly! Hurry rates are creeping up.

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