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To: Tommaso who wrote (16077)	11/17/2004 2:00:49 PM
From: John Vosilla	Read Replies (1) \| Respond to of 116555

On one of the many new real estate radio shows in my area a caller asked the mortgage broker what he should do in his situation as a retired person with no income or savings but social security and a $33K mortgage on a house valued at $250K. The mortgage broker told him cash out tax free $165K with a new $200K option ARM mortgage at1% pay rate. Invest the $165K and earn 5% on your money (perhaps in more overpriced rental property?). Pocket the difference between your 1% pay rate and your 5% returns. On finishing he had to tell the caller the pay rate is variable and it is a negative amortizing loan with the difference between the accrued market rate (now 4.75% and current pay rate added on to the loan. On closing he had the audacity to say those who went fixed rate all these years were the risky loans since they've constantly had to refinance, pay closing costs and still have rates far higher than those who have gone variable during this recent cycle. Are they just plain incompetent or will these industry pimps say and do anything to keep this bubble going for their own benefit? Just amazing.... <I keep wondering if I ought to slap the maximum 15-year-mortgage on my free-and-clear house, and then deposit the money in an assortment of foreign currencies and gold>

To: Tommaso who wrote (16077)	11/18/2004 12:20:51 PM
From: Rainy_Day_Woman	Respond to of 116555

I did a quasi deal like that 18 months ago my private home was free and clear, ran into a couldn't pass up priced home and bought it on the spot to make my low ball offer more attractive, I did a 'clean deal', no contingencies rather than do a bridge, I financed 70% @ 5% 15yr locked, no prepayment penalty - and with an added provision to pay it down and recalculate the remaining payments at the pay down balance - minimum 5k increments, unlimited times, $100 recalculation fee per paydown [sweet] sold the old house, but rather than do a paydown or close out the mortgage, I'm keeping it where I am ever going to find that kind of money @ 5% again? working the cash in several areas, nuther can't pass up RE deal - varied stocks - all fairly liquid