We have to address this issue. Paying off your home or not. So much foolishness

Quote from yepso:

jem, right over everyone's head. Spinning wheels just to be ordinary. Quality, that's where it's at.
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some here get it. I think that is why some trade.
 
Quote from yobo:

You are correct with your statement above however you have it wrong in practice. You should finance your house with a monthly variable rate based on libor. Rates are approximately 2% today. The savings you gain in interest payments can be redirected towards principal thus paying down your house faster. Would you rather pay the bank huge interest expenses or low interest expense?

We have clients who currently own title to 2 million dollar homes and are paying less than 1.75% interest. Beat that with a stick.

Bottom line, if you are going to borrow money do you want to pay 5.3% or 2%?
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IMHO, ARMs are a major reason of why we're in this mess. If it were up to me, they'd be banned outright. If someone can't pay the freight on a 30yr fixed then they don't deserve it in the first place.
 
Quote from jprad:

IMHO, ARMs are a major reason of why we're in this mess. If it were up to me, they'd be banned outright. If someone can't pay the freight on a 30yr fixed then they don't deserve it in the first place.
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I was in mortgage biz a few years back. The ARM's aren't great, but the really horrible loans were the interest only's and neg-am's. Those borrowers never stood a chance.
 
Being highly leveraged is like working with explosives. It can be very well paying but it takes only one mishap to lose everything.
 
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