Anyone know about Mortgages??

[Dena]

Thanks everyone for all of your input.

It's not a mobile home, and nor would i ever consider that.
It's actually a condo, and the value is going up on a consistant 15% a year
The payment that i'm looking at includes insurance and taxes.

I called my dad.. the "official business man".. and if he gives me his blessing and says "do it".. then i'm going to do it. If not, then I probably won't.

Regardless of wether i rent or own (using 80/20 30 yeaer interest only).. I will be spending the same amount give or take $75.
So that's why i'm thinking might as well own.

[SweetCuteness]

I used to work for Wells Fargo Mortgage. An interest only loan isn't all that bad in Arizona - like you said, our real estate is constantly rising. I guess that's one reason to be thankful for the snow birds (maybe the only reason, lol). Our house has increased in value by about $125,000 in 2 years.

All I have to say is - if you don't feel 100% comfortable, don't do it! Buying is always better than renting though - at least you're money is going toward something instead of being "thrown away" every month.

Congratulations - I'm sure you're super excited about it!!

[Dena]

Originally Posted by SweetCuteness

I used to work for Wells Fargo Mortgage. An interest only loan isn't all that bad in Arizona - like you said, our real estate is constantly rising. I guess that's one reason to be thankful for the snow birds (maybe the only reason, lol). Our house has increased in value by about $125,000 in 2 years.

All I have to say is - if you don't feel 100% comfortable, don't do it! Buying is always better than renting though - at least you're money is going toward something instead of being "thrown away" every month.

Congratulations - I'm sure you're super excited about it!!

Thanks.. I am super excited!!!!!
I know the value will go up. it's in the Gilbert area.. and they are revamping the whole area around it.. so i know value will go up.

I'm just hoping my dad will give me his blessing.. and i can do it
Thats the only thing that is holding me back is my dad not supporting me

[Bizzymammabee]

Congrats on the journey. From what I have read and researched buying with 0 down and on an interest only mortgage is very risky with the market changes. Honestly I would suggest doing a first time home buyers with a 3% down payment. You will pay a PMI insurance which backs the mortgage if you default. You pay a few dollars extra a month for having this. The PMI is a hud based/backed loan. Then at a year you can refinance and put the earned equity into the house and lower your cost. I did that when I bought my house 5 years ago. Best thing I ever did. When you refinance the PMI comes off and you are on a conventional loan. The best part is you are paying on your house and you are paying what is considered the market interest rate. The rate is not higher as a penalty.

I personally won't think of doing interest only with what is going on in the market. There was an article recently in the financial times. I will see if I can find it and pm it to you. My friend just bought a house and took out a conventional mortgage and a piggy back which is interest only. They are trying to hurry up and refinance and consolidate it into one loan only because the interest on that interest only loan is a almost 10%.

Good luck. I will try to find that article to describe the comparison and the downfalls of all mortgage variables.

[redrider]

I agree with misslola about the mobile home, however, I disagree on the 15 year loan vs. interest only. If you apply extra funds to the principal like I mentioned before, your payments are still lower and the principal will decrease just about as fast as if you got a 15 year loan, since most of the payments you make on a fully amortized loan for the first 10 years goes towards interest, not principal anyways. Another deciding factor in purchasing is how long are you planning to live there? If you are talking short term (a few years) versus longer, then you may not have enough equity to sell it without a hardship;however, if you are planning to stay there longterm, then interest only loan may be your answer.

[MissLola]

Originally Posted by redrider

I agree with misslola about the mobile home, however, I disagree on the 15 year loan vs. interest only. If you apply extra funds to the principal like I mentioned before, your payments are still lower and the principal will decrease just about as fast as if you got a 15 year loan, since most of the payments you make on a fully amortized loan for the first 10 years goes towards interest, not principal anyways. Another deciding factor in purchasing is how long are you planning to live there? If you are talking short term (a few years) versus longer, then you may not have enough equity to sell it without a hardship;however, if you are planning to stay there longterm, then interest only loan may be your answer.

I have to agree with that. The problem is, most people say they are going to pay extra every month and then don't. The appeal of a 15 year loan is that you HAVE to budget in that amount. But yes, if you do fully plan on budgeting extra every month for your payment to pay down the principal, that is a great option.

[MissLola]

Originally Posted by Dena

Thanks everyone for all of your input.

It's not a mobile home, and nor would i ever consider that.
It's actually a condo, and the value is going up on a consistant 15% a year
The payment that i'm looking at includes insurance and taxes.

I called my dad.. the "official business man".. and if he gives me his blessing and says "do it".. then i'm going to do it. If not, then I probably won't.

Regardless of wether i rent or own (using 80/20 30 yeaer interest only).. I will be spending the same amount give or take $75.
So that's why i'm thinking might as well own.

It sounds like a pretty good deal if the value keeps going up like that, and yes, I would MUCH rather put my money into something I own and can sell for a profit than into rent. I hope it works out for you!

[SweetCuteness]

Originally Posted by Dena

Thanks.. I am super excited!!!!!
I know the value will go up. it's in the Gilbert area.. and they are revamping the whole area around it.. so i know value will go up.

I'm just hoping my dad will give me his blessing.. and i can do it
Thats the only thing that is holding me back is my dad not supporting me

I agree 100% - everything is new in Gilbert and there's a ton of growth there. The prices there and here are going to do nothing but climb so I wouldn't be worried at all about getting turned upside down.

I always have to present my parents with facts on paper to back up my thoughts of something like this to get their buy-in (i.e. with the real estate value % of growth each year, etc).

I'm excited for you!!

[rnnw62]

I hope everything works out for you Dena! Did you say the
Gilbert area?? We have had our Gilbert home increase to
the tune of about $250,000 in about 2 years time and that
is taking the present housing stall into consideration. Gilbert
is one of the most sought after areas in the valley plus it's
safe and it's centrally located for easy access to everything.
We did an interest only to get into our home and I agree with
Britt I don't think it's a bad way to get into home ownership
and since Az's growth rate is very stable and actually out
pacing any other place in the nation right now I think you
have the right idea and are headed in the right direction
where the future is concerned. We have since refinanced
to a fixed rate mortgage and it was easy and definitely one
of the best things we have ever done considering the equity
we are now sitting on. Best wishes to you and I hope
your Dad gives you the thumbs up...

[troubletb]

If you can afford to buy, then that is what you should do. And if you can put a little bit more toward the principal each month that is a good thing too.. Either way you won't lose, except if the maintence fees go up so high you can't afford them.. Look into how the fees were and how fast they have been raising.

Good Luck

[Dena]

Thanks everyone to all of your comments, help and support.

I decided to buy the condo!
The kiddos have a new home!!!!

We move in March 28

[yorkieaddict]

Warmest wishes on your new home! Sounds like you have done your homework and will be a great investment for you and your furbabies.

[sassypup]

Aside from mortgage, don't forget the property tax which is quite huge, other bills that you don't get from renting such as trash, gas, water, etc. Those really add up. I started out on an interest only and that was fine for us, we've since refinanced. During the interest only, we paid extra on months we can afford the interest plus. Also, look into mortgage brokers who can shop around for different options and packages. I've learned that it really doesn't matter who you loan with (ie, co etc), brokers can typically get you a really good deal. I was so naive when we first bought our home, do your homework and shop around for the best interest rate. There's tons of info on the net, good books to read, and great people on here willing to help you out. Loans are such a confusing world when you don't know anything about it.

On the other side of things, owning a home is such an amazing venture in life! Best wishes to you!

Jennie

[yorkieangel]

Don't forget Condo fees.

My Mom's have raised from $200 a month ot over $500 a month in the past 5 years.

And I'm not being rude but you said it would be like $800 a month instead of $700. So are your taxes, interest, condo fees and all included in this $800???? Or is this just PRINCIPLE???

[redrider]

Congratulations! I hope your transaction goes really really smooth for you and you and your babies enjoy your new home.