My thoughts have always been you don't know what's going to happen.

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Jan 14, 2022
12:43:08pm

UNLVcougar Intervention Needed

My thoughts have always been you don't know what's going to happen.

7 years is a long time to know what will happen with the housing market, interest rates, economy, etc.

I realize this is a very conservative approach, but my approach would be "what payment can I afford if I have to stay in this house if it goes past 7 years." If a floating rate could take you above what you can afford or moving to P&I could, then for me, I wouldn't do it.

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UNLVcougar

Bio page: UNLVcougar
Joined: Oct 3, 2001
Last login: Jun 6, 2023
Total posts: 51,689 (2,029 FO)

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Messages

Author

Time

Why get a 30-year fixed mortgage if you are moving within ~7 years?

NorthBayCoug

1/14/22 11:45am

We refinanced with a variable rate mortgage with 7 years fixed, 2.1% interest

1/14/22 11:47am

Why pay 4% I/O variable when you can pay 2.875% fixed in case your plans change or convert to rental property?

mulletino

1/14/22 11:49am

can you keep an owner occupied note when you convert it to an income property?

BYUFBDAD

1/14/22 12:13pm

Yes, as long as you live in the home for 12 months as agreed on the occupancy affidavit.

mulletino

1/14/22 12:21pm

If conversion is a possibility, I'd make sure that document is in the package.

BYUFBDAD

1/14/22 1:21pm

99% of all loans are Fannie Mae or Freddie Mac. You can do whatever you want after you’ve occupied the property for 12

mulletino

1/14/22 2:12pm

<< Deleted >>

NorthBayCoug

1/14/22 12:33pm

That's what I used to think, but here is why I have changed my way of thinking

NorthBayCoug

1/14/22 12:39pm

Doesn't that $367/mo go to your equity, though? So you'll get more when you

RGGeemer

1/14/22 12:45pm

It does. But does that $367/month in the bank increase at the same rate

NorthBayCoug

1/14/22 12:48pm

My current view = 15 year mortgage, most expensive home you can afford-- even

Socrates Johnson

1/14/22 11:50am

with rates this low 30 year is objectively better than 15

Gente_Boa

1/14/22 11:53am

How so?

Socrates Johnson

1/14/22 12:32pm

yes, And you tie up less cash now in your monthly payments that you can use to

Gente_Boa

1/14/22 3:00pm

If you can be that disciplined, there is no doubt that would be something.

Socrates Johnson

1/14/22 7:00pm

Risky

RGGeemer

1/14/22 11:55am

lol. This is truly terrible advice. Buy the most expensive house you can possibl

Mayor of Cougartown

1/14/22 11:59am

To be fair, we bought in 2017 with the idea that we would move to a bigger house

RGGeemer

1/14/22 12:09pm

unprecedented times. Can't make a blanket recommendation on something based on

Mayor of Cougartown

1/14/22 12:15pm

The purpose is to force you to save more without your noticing it or having

Socrates Johnson

1/14/22 12:20pm

That is fine but it is a terrible return. 15 year rates have been in the 2s

johnnybyu

1/14/22 4:23pm

If you are disciplined enough to actually do it, I agree.

Socrates Johnson

1/14/22 7:01pm

If you buy on a 15 year mortgage, more than half of your payment is savings

Socrates Johnson

1/14/22 12:16pm

ok I get what you're saying. A way to force save.

Mayor of Cougartown

1/14/22 12:37pm

I agree house poor sucks, but if you limit to what they will loan you on a 15

Socrates Johnson

1/14/22 12:40pm

4% on a home hasn't been a good rate for a long time.

IdahoCoug

1/14/22 11:52am

What if you want to pay an extra 35% toward interest instead of principal and escrows?

mulletino

1/14/22 11:58am

Isn’t the worry things could change. Rates climb and you don’t move when you

SouthernBlueBlood

1/14/22 11:53am

So you can keep the house when you move as a rental

Gente_Boa

1/14/22 11:54am

If you can afford a new house in 7 years

RGGeemer

1/14/22 11:54am

Who knows what they're going to be doing in 7 years?

fattycoug

1/14/22 12:10pm

My thoughts have always been you don't know what's going to happen.

UNLVcougar

1/14/22 12:43pm

Explain to me how you believe an interest only loan is better than a regular 30 year? You do realize any additional

kimdaddy35

1/14/22 12:57pm

Yes, but do you realize the money you put into your house, which in

NorthBayCoug

1/14/22 3:56pm

I like interest only but it all comes down to rate. The return on paying your

johnnybyu

1/14/22 4:21pm

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