|
#1
|
|||
|
|||
Re: How much can I afford to pay in rent?
Ive been meaning to clean out my PM box... its been full for quite some time. [img]/images/graemlins/crazy.gif[/img] Anyone know what is the max number of PMs you can have saved?
|
#2
|
|||
|
|||
Re: How much can I afford to pay in rent?
dcasper,
Your arguments are naive except for #3. Here are my arguments for why an ARM is not good right now. 1. Interest rates at a relative low and are likely to increase in the coming years. I will caveat that I have not looked at actual interest rates recently and if this has already occured, my argument sucks. 2. The housing market in many areas is due for a downward turn and this could devastate someone who took an ARM expecting to be out in a couple years. The choice of leave and take a big loss of equity vs pay a much higher, possibly too high, payment is an ugly one. And no bold either. J |
#3
|
|||
|
|||
Re: How much can I afford to pay in rent?
[ QUOTE ]
2. The housing market in many areas is due for a downward turn and this could devastate someone who took an ARM expecting to be out in a couple years. The choice of leave and take a big loss of equity vs pay a much higher, possibly too high, payment is an ugly one. [/ QUOTE ] I guess my view of ARM's are quite different. I happen to be 18 months into a 5/1, so there may be a little bit of me defending my decision wading into this... If a person KNOWS they will only be in a home for say 2-4 years, how can an ARM be bad? Are you saying that the market could take such a dive that the owner may not be able to sell at the end of that period? Aside from that possibility, which IMO is remote, why so negative? 4 yr comparison (based on bankrate.com overnight averages): 200k mtg 30yr fixed, 5.7%, $1160.80/month, 48 months=$55718.40 5/1 ARM, 5.24%, $1103.17/month, 48 months=$52952.16 So $2766 difference in favor of the ARM And 200k should get you a great condo in about 75% of the country. Fill me in if I'm missing something major here... [img]/images/graemlins/confused.gif[/img] Edit: Of course I stupidly forget the possibility of being forced to sell for less. Go ahead, kick me... Another Edit: but since that could happen with a 30 yr fixed also, it's irrelevant. No kicking! Now I'm just confused and rambling.... |
#4
|
|||
|
|||
Re: How much can I afford to pay in rent?
You calculations assume interest rates dont move... correct?
|
#5
|
|||
|
|||
Re: How much can I afford to pay in rent?
[ QUOTE ]
You calculations assume interest rates dont move... correct? [/ QUOTE ] Absolutely no assumption at all. In a 4 year comparison, I GARANTEE interest rates don't move. By definition, the rate in a 5/1 ARM doesn't move for 5 years. Should I also define 30yr FIXED.....??? |
|
|