Interest only home loans?

[D55]

Hmmm...agree to disagree?.................kflo, I thought it used to be they thought it got risky for the banks money at anything over 25%-30% of gross but that was quite awhile back.

10K for "camp"?.....must be a great experience......Personally, I think that banking on your bonus for anything that is contract related is iffy but thats just me. That would be a plus each year but unless you have it in a "contract" that you can show the banker, I am not sure he'll give it much weight.
Best of luck in this endeavor and it is noble to think you will live in this home for 30 years but I'll give you 10 max.

[kflo]

5k for each kid. don't know if that's reasonable or not, but that's what the mrs. said to put in.

bonus isn't contractual, but minimums are fairly stable. it's not sales related. i have a target bonus, which is a guide given reasonable performance. and i'd only be relying on a portion of the bonus for principle payment on an annual basis.

they do still say the 25-30% of gross (some say 40%). that really gives no consideration to personal circumstances or expenses or lifestyle though.

[gilesfan]

How Bad Will the 2007 Property Market Be?

And this is just for 2007. By most accounts, the housing market will be back on the upswing soon.

[gilesfan]

KFlO, that sounds awfully risky and probably not a risk I would like to take. Seems like your buying more house than you can afford right now with expectations that your income will grow. This is the scenario most lenders are offering the interest only loan, but I think you need to realize this is awfully dangerous. I also play it a little safer than I could. My income to mortgage ratio is less than 15% and this allows me to put more money toward savings, investments, and the ability to spend more on entertainment type expenses.

I think most lenders look at 30%. And of course, if you don't spend alot of discretionary income, you can spend more on housing.

What happens down the road if your wife doesn't grow her business as expected? What happens if the economy gets softer and you don't hit all your bonuses?

Also, I'm in the camp of not making extra principle payments and putting that money into investments. In that case, you have some money put away for rough times.

[kflo]

those whose income is tied to the real estate market generally have a vested interest in promoting a healthy real estate market.

[kflo]

our gross income to mortgage ratio will be in the 15-20% range, not including salary increases (but including my short term target bonus). the IO, again, will just provide some timing flexibility. i'm probably more concerned with the unknown costs of home ownership and kids than i am of income volatility.

my rainier day funds will hopefully in part come from my long term comp, which vests over 2-5 years, and is partly based on option valuation.

my wife currently works 2 days a week. she will be adding a day to her schedule when my youngest starts pre-k. she has turned away prospective patients due to time availability. there certainly is risk, but there's upside as well.

[kflo]

i was hypothesizing on why frenchman called you a whore. i have personally found that those in related fields do always try and spin it as positive. not saying you were doing it, just my experience with those related to the market (mortgages, re agents, etc). they need turnover and appreciation, generally. not many make money equally in a rising or falling market.

[D55]

If you're worried about the costs of owning, i.e. upkeep and repairs, buy a warranty. Mine costs $250 yr and a $45 deductible. I've used it 5 times over 4 yrs. and it is well worth it.

Matter of fact, my water heater blew a few months back and it cost over $10,000 what with the office / business equipment that was ruined, carpet, walls, etc. Homeowners only covered so much, but the warranty covered the rest. Upkeep isn't much if you tinker a bit. Cost of kids will kill any dreams though....

[Sawman]

I'd like to ask the posters in this thread to please keep your posts on topic and refrain from directing your post "at" another poster. Each of us is entitled to their opinion, and while it is ok to disagree with someone's opinion, it is not ok to call them names or use derogatory terms in reference to their person.

[frenchman]

By most accounts, the housing market will be back on the upswing soon.

...you keep saying this, but provide evidence that contradicts your claims of significant real price rises.

You keep providing links that agree with me.

You should read some of your wn links sometime sport, did they not teach you that at your real estate night school course?

[Sawman]

Originally Posted by frenchman

You should read some of your wn links sometime sport, did they not teach you that at your real estate night school course?

Not to single anyone out, but this is an example of what I'd like everybody to refrain from. Right now, everybody is doing it. If one person takes the first step, we can continue to have healthy discussion while still showing respect to our fellow posters.

Simply do not include the reference to your fellow poster and we've made plenty of progress.

[Sawman]

I express an opinion, state it as an opinion and give my reasons, and a frustrated real estate agent disagrees, but provides no substance for his disagreement...in fact, he cites things that do not back him up

I say he is being a bonehead.

He cals me an "idiot"...then cites another source that contradicts him.

I completely agree, both parties felt the need to resort to namecalling.

So...we could go back to the beginning and not allow anyone to reference another poster...perhaps forbid disagreement here...does that make sense?

You and I are disagreeing about a subject, and yet neither one of us has felt the need to call the other person an idiot. Disagreement is just fine, as long as it's done respectfully.

Frankly...I encourage people to disagree with me...it does not bother me, unless its like in this thread and someone who is basically ill-informed and incapable of substantiating his points starts debating me, without debating my points.

I know you do, which is why I didn't think you'd take offense to me selecting your quote to use as an example. As I mentioned that I wasn't trying to single anyone out, I thought you'd feel I was at least showing you that much respect.

You want to improve the board...enforce a degree if intellect.

As unrealistic as that is, it's somewhat the point I was making. Intellect involves using common sense and respect, to a degree, even when the other person isn't.

This thread began with a solicitation of opinions...you tell me if my initial response was good or bad, on target or off...before another poster began arguing with my opinion, and not the point of the question of the thread.

Your initial response was on target, and as I said, I'm not trying to single you out. However, despite the name-calling, I think everybody here has some amount of respect for others, I just ask that it's shown more in the text that we send.

...and you pick me for an example? Try again Mr. Moderator...but read the whole thread this time. OK?

I did read the entire thread, and I didn't want to bring up a post from yesterday when demonstrating an example. The fact that you posted when you did, and used the tone that you used was enough to use it as an example. I'm not saying his opinion is better than yours, nor am I saying that yours is better than his, but I am saying that you can all express disagreement with each other without making it seem like a personal attack.

[DR3AMR]

Wow........haven't checked this thread in a while. Thanks for the responses.

[gilesfan]

I'm not a real estate agent or broker.

I don't have a problem discussing the real estate market with someone that has a different opinion, but I'm done arguing with someone that resorts to the type of arguments in this thread.

I have my reasones...population, history, interest rates, predicted fed activity, job growth, income levels, etc. I also don't have a problem with peolple that have different opinions. My opinion is similar to Mark Vitner that frequents Wachovia. But hey, maybe were both wrong.

[LongtimeBravesFan]

I think we need to start a summer camp. If we can get five grand per kid we can take the other nine months off.