Re: How can mortgage payment be this low?

I was saying that an adjustable rate mortgage is not a good idea except in very
certain situations. Like you will pay off the mortgage (from another poster) or
you will sell within a year.

But I stick to the fact that for the average person it's bad deal

>>"lpogoda" wrote;
>You're young and buying a house for the first time.  You have a decent job,
>but because you're new and inexperienced, your annual earnings aren't what

>others who've been there five or ten years are making.  You can reasonably
>expect that in a few years you'll be making more, perhaps considerably more.

Dumb REALLY dumb idea. Always buy less house than you can afford and if that
means rent then rent or wait. It's like the couples who are just married and
both work and buy as much house as they can, THEN have a couple of kids. The
house ends up going to back to the bank. Around here we call it house poor.

The other type where the loan rate is adjusted each year has no where to go but
up right now. 

The other thing the ads don't tell you is that the more you borrow the lower
the rate. Over 100,000.00 is lower interest then it goes down again at 250k  As
a general rule the lower the borrowed amount and the homes purchase price the
higher the interest rate and the better the credit. It has been proven that
lower income people lose their houses more than higher income people, so the
lenders risk is higher.

Also if you are putting less than 20% down most places require you to carry
mortgage insurance. It's not for you it's for them. If you defailt on the loan
then they are sure not to lose any money. I put a lot down on our house but on
my daughters house her payment was 350.00 a month and the default insurance was
about 35.00 on top of that.

So your payment is principal, interest. taxes, home owners insurance and
default insurance if needed.