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Thread summary:

Real Estate: foreclosure, interest only mortgages, loan, rent apt, housing, market.

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Old 04-03-2008, 07:01 PM
 
Location: NJ
2,210 posts, read 7,013,444 times
Reputation: 2193

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Quote:
Originally Posted by JoePAz View Post
How do you even know what the reset period is? What if the reset is in 10 years. Alot can happen in 10 years and maybe her income would be much higher then.
Something did happen within that 10 years - she got divorced and lost her job.

Making big financial commitments for the future based on hypothetical "maybe I'll be making more money" IS BAD MONEY MANGAGEMENT. It is gambling, pure and simple. This woman is definitely not alone in that, there are plenty more out there, but it does not change the fact that taking out adjustable interest only loans based on guesswork about future income and the future economy is VERY RISKY. People forgot that risks have a big downside too.
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Old 04-04-2008, 11:49 AM
 
Location: Kansas
3,855 posts, read 13,239,753 times
Reputation: 1734
Then again you'd never buy a single house or even move out of your parent's house if you had to assume in your finacial decisions that tomorrow you could be unemployed. All you can do is base your financial decisions around what you are doing today....and for the future you may be able to assume a 2%/yr income adjustment.
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Old 04-04-2008, 03:06 PM
 
Location: NJ
2,210 posts, read 7,013,444 times
Reputation: 2193
Quote:
Originally Posted by drjones96 View Post
Then again you'd never buy a single house or even move out of your parent's house if you had to assume in your finacial decisions that tomorrow you could be unemployed. All you can do is base your financial decisions around what you are doing today....and for the future you may be able to assume a 2%/yr income adjustment.
Of course not every eventuality is known. But you can build in a safety net for eventualities. That is what life insurance is for. That is what a minumum of 6 months living expenses in the bank is for. That is what paying into a 401k and IRA's are for. That is why the wisest people I know buy modest homes with fixed mortgages that are affordable (at a stretch) on ONE income, so that if one partner leaves, dies, loses a job or becomes disabled, the family does not lose their home. That is called GOOD MONEY MANAGEMENT and fiscal responsibility.

It is not rocket science. It just means watching where the money goes, budgeting and not buying whatever they want the moment they want it. Skills which sadly appear to be in shortage these days.
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Old 04-05-2008, 10:10 AM
 
86 posts, read 413,173 times
Reputation: 36
The CNN story doesn't say she is divorced, it says "Estranged" which has many meanings.

One could be he ran off with the "Other" ..(insert gender/item of choice)... Until they get divorced he may not be paying a red cent to her and figures to let her lose the house and spend money (she doesn't have) for a divorce lawyer. If the house is gone by the time it gets to court he probably figures he'll get hit with less alimony.
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