 Im a 1st time buyer looking for a property in london. Budget is £200,000, where in can i get value 4 money? |
| Current seeking 2bed house/flat in london, this is a challenge being 1st time buyers but we desperately need to get onto the property ladder. Please can you advise what area within london or ... |
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| My husband and I are looking for an apartment in or around Galena, IL. We have already looked at all the major apartment websites and have had little to no luck. I was wondering if anybody knows ... |
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| my husband and i are thinking about buying a home for the first time. we have heard that first time home buyers can receive discounts. we also heard that we can have an easier time getting a loan and ... |
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I've been looking around online and found a website claiming to provide information on how to acquire for free unowned property or land.
how is this possible? i mean if it was that ... |
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| If they receive less than what is owed, could the owner be sued for the difference?... |
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 Where can you buy a decent detached house under £250,000 and still live max 1 hour away from London? |
| We want to buy property outside of London, but want to be able to commute in for work. Where can I find a decent detached house in a good area and close to ammenities and be no more than an hour ... |
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| I am renting a 2 bedroom unit out of a residential home. My unit is attached to the home with my own separate entrace, with my own restroom and kitchen. I do not have guests over on a regular basis.i ... |
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 Is the real estate boom over? |
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John C | Is an interest only loan dangerous in this housing market? |
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Carolinahomerates.com
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depends where you live...if your area is declining....then you will definitely LOSE VALUE.....
places like charlotte, nc has been going up...and you can still use an interest only loan |
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astralpen
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I wouldn't do it in any kind of market. Best loan to get is a 15-yr. fixed. |
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Nevada Pokerqueen
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An interest only loan is dangerous in ANY market.
It means you are paying interest for getting the loan and nothing on the price of the home (principal). How will you ever get the loan paid off if you are only paying interest?
Interest only loans can be long term or short term. Short term is better but the best loan is where you are constantly paying on both and the interest amount is low. Then if you really want to get ahead you pay slightly more on the loan each month and it is amazing how fast you can get it down. By paying just $100 more a month, you can turn a 30 year loan into a 20 year loan, I have done it.
Another reason an interest only loan is very dangerous in a bad market or a buyers market is that no one will want to assume your loan. Also you have not paid down any of the principal, therefore, you may lose any money you paid in down payment if any. You will not make money and you will have to work hard or wait out the bad market before you sell so that you won't lose.
Stay away from these loans. The sharks peddle them as an easy way to get into a home but they are not good for you. |
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Net Advisor
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Where have you been my friend?
I pray you don't have an interest only loan with an adjustable rate mortgage (ARM) of 5 years or less, and no second mortgage, and you put 20% of more down?
If not.
Ultimately it depends on few factors:
1. Location. Location. Location.
2. A 10 Years interest only in a good location might be ok. Just know that your house will have the same debt as you started and you hope that the market appreciates greater than the interest rate each year or net appreciation is greater than total interest after 10 years.
I would not be buying right now anyway unless you "have to" - and be careful. I have tons of files why not to buy right now unless you are savvy speculator with a ton of cash, don't need to sell for 7-10 years, and a decline in prop value of 30% has no impact on your financial health. Too much to post here.
The FED is expected to lower FED funds rate by 1/4 point today. And Wall Street expects another 1/4 point cut in Oct 2007, and another 1/4 point cut in Dec 2007. All this can change as economic and market conditions change.
You can consider refining an existing ARM into a fixed if poss. Check with your lender when rates drop. Good Luck! |
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Kali's Mom
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If your home is depreciating in value, then yes. What is really dangerous is a negative amortization loan, but they are not done as often anymore. An interest only loan does not help you pay down your principle, but unless your home is going down in value, it also is not hurting you. |
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Indiana Frenchman
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not according to this "expert"...
The last interest-only mortgage craze ended with a wave of foreclosures in the Great Depression. Today's interest-only ARMs are even riskier.
See URL for more |
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k man
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they are the worst anywhere. you are just as well off renting. |
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Jerry
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This link takes you to a Tutorial about Interest-Only Mortgages.... |
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Frederick M
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It will be very difficult to obtain an interest only loan in this housing market. The interest-only loan instrument has been abused, and is now treated like the red-headed stepchild of mortgages by just about everyone.
But there is nothing inherently bad about zeros. They are good loans for people who understand them and whose financial situation is suited to them. That is, to people who cannot immediately afford a down payment on a home, but who realistically expect a substantial rise in income within a short period of time - no more than two years, tops. |
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Deepinthegame
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The best answer to your question can only be obtained by knowing the housing market in the area you are looking into. The short, simple answer is no. However, a "stable" housing area(I use quotes because the term is extremely relative compared to what it meant 3-5 yrs ago when almost all markets were considered stable) that has appreciation or is stagnant in value is a lot less risky. It is essential to understand that an interest only loan is essentially a balloon, with the exception that at the end of your fixed interest only period your amortization schedule is recalculated causing your payment to skyrocket unless you have been overpaying your mortgage every month. To elaborate, if you were to get a $200,000, 30 year mortgage with a 10 year interest only period and an interest rate of 7.5% your payment would be fixed at $1,250.00 for the first 10 years of your loan. However, once that period is up you now have a $200,000 loan and only 20 years to pay it off, therefore your payment would be $1,611.19 for the remaining 20 years, BUT that is still using the interest rate of 7.5% and most likely the mortgage will adjust every 6 months after the initial 10 year period(and it's not going to adjust down). A 30 year fixed mortgage at 7.5% would have a payment of $1,398.43 and never adjust. It is not a simple answer; it is based on your current market area as previously mentioned, as well as your personal financial situation. If you are not sure that you will be able to start applying extra money to your principal balance in the near future to gain equity it is not advisable to get into this program. |
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