There are no secure aerospace jobs. it’s a terrible industry.[/quote]
Patb, I agree with you, the ‘general’ aerospace industry is not secure.
However, the products my company make cannot be relocated:
– Most management lives within minutes of the facility
– Key engineering personnel would not relocate
– Cost to move or buy capital test equipment
– Cost and delay to requalify all products in new facility
– Union shop
Our product is one manufacturer of two in the world. The other is foreign owned. It is impossible for a new company to start with out legacy product. We supply commercial and government products to several satelite companies. The only way to relocate this type of facility would be slowly moving mfg dept by mfg dept.
I am sure their are other companies, unions, or government jobs that have fixed increases at or above 3%. Let’s see… SDGE, DWP, MWD, SC Edision, PGE, Sempra Energy, State employees (who can’t be laid-off), UC teachers,
4plex, the 10/20 ARM may be exactly what he has. I will have to check. He did mentioned his rate increase is limited each year. This would make it even better.
I did find a 10/20 ARM for a $417k loan/ $500k value @ 4.625% with $400 in fees.
Payment = $1,739; Income = $70k @ 30% LTD
Initial Cap: 5%; Period Cap: 2%; Max Cap: 5%
In 10 yrs, the payment for the 20yr fixed for a $417k loan @ 9.625 with no fees.
Payment = $3921 maximum risk.
Delta = $2,182
A 30 yr fixed (for comparison only) @ $5.375% with $1234 in fees.
Payment = $2,335
I couldn’t make the numbers work for someone buying at max LTD ratios. The $70k income only came up to $93.4k per year at 3% annual increases. They would need to be at 9% annual increases or $201k to make up the difference. I am now under the belief 10/20 ARMs will work only as Patb indicated. The terms of my coworker appear to be better than is indicated above and may be the exception not the rule. If the interest rates stay low all the better.
For those that are saying in 10 years interest rates and inflation will be above 10%, you should be jumping at these deals and the banks (Government) will be taking it in the short again.
