Comments on: Here’s why to Buy Now

By: Poe

Poe — Sat, 05 Apr 2008 23:34:08 +0000

I agree with Red in that monthly payments are not the same as the cost of the home. We are in this mess not because of that though–we are in this mess because people dont know how to handle their money. Thats the root cause. I myself have payment “Option ARM” (aka NegAm) but signed up for it with a reason in mind: I take the saving I experience every month (because Option ARMs payments are much lower than regular mortgage payments) and put it into a conservative investment vehicle. Its done quite well for me and I have a significant stockpile now. I look at it as a trickle out version of a HELOC. Mostly because I am giving up equity and adding a small amount to my mortgage every month (in a HELOC you add another big mortgage). But its better because I have cash and not a line of credit from a bank.

By: Tom Swell

Tom Swell — Sat, 05 Apr 2008 07:04:02 +0000

interesting… anyone else care to comment?

By: Red

Red — Fri, 04 Apr 2008 21:34:02 +0000

The monthly payment is NOT the cost of a home, and the belief that it is, is a major reason we are in this mess. The worst cases are the homes sold with the “payment Option” loan, or the “builder buy down” loans. Inflate the value of the home by $100000 but keep the payment the same, sounds OK; but try to sell or refinance or handle the rate adjustment and you find yourself $100,000 in the hole.
The best time to buy is when the horrible interest rates have driven the prices of homes to pathetic lows, and no one can afford the monthly costs. NOT when the low interest rates have driven the buying frenzy to exotic prices that will not be seen again for 10 years, and no one can afford the monthly costs….