If Only My Teeth Could Undergo the Procedure Without Me

Hey look! Someone has started a listing (last year) of bay area bloggers! Check it out. I know very few of these people! Cool. Go join if you qualify geographically.

The real estate agent told us the loan we qualify for. Good lord! While I won't tell you the exact amount, it has me a bit staggered. But of course it reflects the market around here, too. Does anyone have any opinions about the loans where you are expected to refinance within five years, or seven, or ten? Any scenarios where worldwide economic collapse after, say, three years, would cause us to rue the day that we agreed to such a loan?

I went to the dentist. And I have to go back next week. Damn it. Apparently two of my fillings have failed. My mouth is trying to throw them out. Argh! I was lying there listening to the scrapey! scrapey! scrapey! sounds (and hearing someone scream... oh it's ME!) and wishing that at least temporarily I could seat my ears somewhere in the palms of my hands. Wouldn't that be better? To close off the ears you could simply make a fist. To hear something better you could extend your hands toward someone.

I have improved immensely upon nature herself! With this invention, Hand Ears, I will make a million dollars!

And on a grimmer note. Voting in America, purloined from Kimberly.

Comments

[GraceD]

And you can respond with outstretched hand as you offer to 'lend an ear'.

[Bob O'Shaughnessy]

My fabulous accountant and money manager (the one who cut up my credit cards on the day I married her and the one who paid off all of all of my student loans in three years on her kindergarten teacher's salary) has a real problem with the 'interest-only' loans.

From what I gather, you gain no equity on the home while you are paying the loan, which is half the reason to be buying a house for yourself, instead of renting.

[Barak]

While Bob is right about the 'interest only' loans, I don't think that's what you are asking.

I would say the 5 year 'balloon' payment loans depend on a couple questions. First, how long do you expect to stay in your new home? If it's less than 5 years, then the loans are fine. If longer, then you have to look at what you expect interest rates to do between now and then. If the economy were to collapse, interest rates would likely go way up, making the 5 year loans a poor idea. Short of that, interest rates are close to their all time low, implying that they would almost certainly go up in the next five years. So it would depend on your deal. If you get a really good rate on the 5 year, it still may be a good idea, otherwise, the 30 year loans probably make more sense.

[badgerbag]

i would say no on the 5 year. maybe on a longer one. we've only been in here a year and i'm feeling a little queasy about the 7 year, since i like the house a lot.

just because they will lend you a giant amount does not mean you should use it.. you know that i guess.. i'm just saying. they will def. try to make you think you can afford more house than you can with the monthly payments and prop. tax

but it sounds like you are doing great. and talking to 2 lenders, way to go! now you can bargain for lower interest rates!!!

[Ms. Jane]

Interest Only loans are like buying futures. Not a sound investment because it makes the assumtion that the housing market will never hit a slump.

I'll have to kick your ass if you do that, and I really would rather cuddle.

Also consider your personality, like, if you do get a house, are you ever going to move again? I've owned my house for eight years now, but I only have my employment to worry about. How likely is it that Manny would take a job elsewhere when all the Candy Factory jobs are here?

Really good people to ask are your real estate agent and your loan broker.

[Bobbi]

With interest rates being as low as they are, I'd aim for a 30-year fixed right now, if you could. That's your safest bet -- one that will leave you with the least amount of anxiety once you close on your house.