If your estimates are accurate, you can at minimum break even and lose the house and it’s potential to turn into a disaster when the ARM resets or it falls 10,20,40k below your purchase price. One scenario is likely, the other one is definite.
It isn’t what you want to hear, but it is reality if you don’t want to end up with bad credit or worse, bankruptcy.
Just because you can afford it doesn’t mean you should wait and see what happens. 1k in the bank is another 1k towards retirement or the kid’s college fund.
