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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: Rutgers who wrote (21741)	6/18/2004 7:40:03 PM
From: Israel	Read Replies (1) \| Respond to of 306849

So, does Washington Mutual lend $550 large to this Ave. Joe? The answer, I submit, is No, No and No. Minimum payment on a 1 month MTA is $1,866.21 and the interest only payment (at a 2.90% margin..about right for a no point loan) is $1926.87.. Add approx $500 a month for insurance and Taxes.. And presto you have a monthly mortgage payment as low as $2366.21.. thats a DTI of about 78%, assuming he has no other monthly debt obligations.. Now even though by making the interest only payment, or minimum payment he will not be building equity in his home.. At a reasonable 5% (rather conservative I think) appreciation on the property over the next 7 years.. At the end of year 7, his home is worth $918,000.00 (almost $400K after year 7 worth of equity.) Now Im not trying to justify what this guy is doing.. But if he wanted to find a lender.. HE EASILY COULD! Hell, I can get him approved in 48 hours. Israel