This is my last post on the subject. PS, I don’t think you and I disagree all that much. I took issue with this statement: “In a market of rising interest rates, anyone who is not converting to a loan that is FIXED and PAYING PRINCIPAL, is in over their heads.” For all the reasons I mentioned above, I don’t believe this is true. I gave examples of my friends whose salaries were going to increase. They’re lawyers, at large law firms in town. Most will see their base salaries increase by about $35k over the next three years. Including bonuses, the increases will be even higher. That’s going to give them a lot of extra cash three years from now. The chart that the link below leads to is somewhat dated, salaries have increased since it was made, but you get the idea.
There aren’t a lot of these jobs out there and I don’t think the fact that these people exist is going to have any significant effect on the market in the coming years. The point I was trying to make was simply that not everyone who got an ARM in the last couple of years is going to end up in foreclosure, or are in over their heads. Since I don’t know any other way to put that, I’m done with this subject.
