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Strategies & Market Trends : The Residential Real Estate Crash Index
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To: CalculatedRisk who wrote (36165)7/25/2005 1:28:38 AM
From: Captain JackRead Replies (3) of 306849
 
Why any bank would give an interest only mortgage is a question. If the borrower cannot afford the principal payment, they simply cannot afford the home! Those making the such loans in hopes of selling in a few years are not gamblers, they are fools. Mortgages are usually required and at todays rates a bargain. As a RE broker in 1 state with a sales license in an adjoining state I discourage people from such potential disaster and lead them to another agency. Worse than those that take an 80/20 (80% mortgage and 20% 2nd) to purchase. Savings, gifts from family, anything to eliminate the PMI or again,,, consider renting.
Flipping is a gamble-- currently like playing musical chairs, you don't want to be the last one standing when the music stops. Until last year I was buying as many as 12 homes (mostly condos) from developers at pre-construction prices. Today I own my 2 homes and hold only 2 in inventory as flippers. If they went to zero it would not be a problem as they were cash purchases made with prior gains.
Bubble-- certainly not in the area of the mid-west where I keep a 2nd home to use when visiting family. Possibly a slight one in the coastal area of the Carolinas where I live but it is firmly believed there will be enough people from Yankee Land wanting to retire warmly keep a house from falling a huge amount, not so with the over abundance of condos that are being sold years before completion.
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