[LuckyInOC]

Patb, I don’t see why there is only one class of buyer who will use an I/O loan effectively.

[quote=patb]it struck me there is only one class of buyer who will use an I/O loan effectively. Someone who by nature will have a very serious increase in their income soon. Recent graduates from med school, People starting new small businesses (Franchises), people in apprenticeship programs.

But that’s maybe 1-2% of all buyers. I/O’s are otherwise a tool for flippers. if you aren’t amortizing the debt you will see a big spike in
payments, and for what?[/quote]

For those with 10 yr I/O loans, I don’t see why they could not afford the payments in the future?
Assume when they purchased a home with $3800 payment at 30% debt to income ratio. This would be about $152k annual or $13.7k monthly household income. Not much of a stretch. Now, fast forward 10 years with at nominal 3% annual pay increases. The income now would be $204k annual or $17.0k monthly. There is $4k of additional income to pay the maximum $2800 increase to $6700. If the borrowers happened to paid all their bills in the 10 years, they should have enough income to pay for the increase. If they did not work for a company that gets 3%+ year over year annual pay increases, then this type of loan wasn’t for them.

I have a coworker and his wife in a secure aerospace jobs that did the 10 yr IO loan in 2004 and he and his wife gets at least the annual 3% increase each and every year. Now, they may be upside down, but they still will be able to afford the payment. I believe his means met his ends and may come out unscathed. My coworker had to move to get his kids into a better Jr High & High School. The 3 and 5 yr I/O loans will have problems under these specific conditions.

I highly doubt there is any 10 yr I/O loans available, I haven’t checked. I might actually consider it now that home values are somewhat down and if we are in for a high inflationary period. I would even put my bank money as a down…

Lucky In OC

[LuckyInOC]

Patb, I don’t see why there is only one class of buyer who will use an I/O loan effectively.

[quote=patb]it struck me there is only one class of buyer who will use an I/O loan effectively. Someone who by nature will have a very serious increase in their income soon. Recent graduates from med school, People starting new small businesses (Franchises), people in apprenticeship programs.

But that’s maybe 1-2% of all buyers. I/O’s are otherwise a tool for flippers. if you aren’t amortizing the debt you will see a big spike in
payments, and for what?[/quote]

For those with 10 yr I/O loans, I don’t see why they could not afford the payments in the future?
Assume when they purchased a home with $3800 payment at 30% debt to income ratio. This would be about $152k annual or $13.7k monthly household income. Not much of a stretch. Now, fast forward 10 years with at nominal 3% annual pay increases. The income now would be $204k annual or $17.0k monthly. There is $4k of additional income to pay the maximum $2800 increase to $6700. If the borrowers happened to paid all their bills in the 10 years, they should have enough income to pay for the increase. If they did not work for a company that gets 3%+ year over year annual pay increases, then this type of loan wasn’t for them.

I have a coworker and his wife in a secure aerospace jobs that did the 10 yr IO loan in 2004 and he and his wife gets at least the annual 3% increase each and every year. Now, they may be upside down, but they still will be able to afford the payment. I believe his means met his ends and may come out unscathed. My coworker had to move to get his kids into a better Jr High & High School. The 3 and 5 yr I/O loans will have problems under these specific conditions.

I highly doubt there is any 10 yr I/O loans available, I haven’t checked. I might actually consider it now that home values are somewhat down and if we are in for a high inflationary period. I would even put my bank money as a down…

Lucky In OC

[LuckyInOC]

Patb, I don’t see why there is only one class of buyer who will use an I/O loan effectively.

[quote=patb]it struck me there is only one class of buyer who will use an I/O loan effectively. Someone who by nature will have a very serious increase in their income soon. Recent graduates from med school, People starting new small businesses (Franchises), people in apprenticeship programs.

But that’s maybe 1-2% of all buyers. I/O’s are otherwise a tool for flippers. if you aren’t amortizing the debt you will see a big spike in
payments, and for what?[/quote]

For those with 10 yr I/O loans, I don’t see why they could not afford the payments in the future?
Assume when they purchased a home with $3800 payment at 30% debt to income ratio. This would be about $152k annual or $13.7k monthly household income. Not much of a stretch. Now, fast forward 10 years with at nominal 3% annual pay increases. The income now would be $204k annual or $17.0k monthly. There is $4k of additional income to pay the maximum $2800 increase to $6700. If the borrowers happened to paid all their bills in the 10 years, they should have enough income to pay for the increase. If they did not work for a company that gets 3%+ year over year annual pay increases, then this type of loan wasn’t for them.

I have a coworker and his wife in a secure aerospace jobs that did the 10 yr IO loan in 2004 and he and his wife gets at least the annual 3% increase each and every year. Now, they may be upside down, but they still will be able to afford the payment. I believe his means met his ends and may come out unscathed. My coworker had to move to get his kids into a better Jr High & High School. The 3 and 5 yr I/O loans will have problems under these specific conditions.

I highly doubt there is any 10 yr I/O loans available, I haven’t checked. I might actually consider it now that home values are somewhat down and if we are in for a high inflationary period. I would even put my bank money as a down…

Lucky In OC

[LuckyInOC]

Patb, I don’t see why there is only one class of buyer who will use an I/O loan effectively.

[quote=patb]it struck me there is only one class of buyer who will use an I/O loan effectively. Someone who by nature will have a very serious increase in their income soon. Recent graduates from med school, People starting new small businesses (Franchises), people in apprenticeship programs.

But that’s maybe 1-2% of all buyers. I/O’s are otherwise a tool for flippers. if you aren’t amortizing the debt you will see a big spike in
payments, and for what?[/quote]

For those with 10 yr I/O loans, I don’t see why they could not afford the payments in the future?
Assume when they purchased a home with $3800 payment at 30% debt to income ratio. This would be about $152k annual or $13.7k monthly household income. Not much of a stretch. Now, fast forward 10 years with at nominal 3% annual pay increases. The income now would be $204k annual or $17.0k monthly. There is $4k of additional income to pay the maximum $2800 increase to $6700. If the borrowers happened to paid all their bills in the 10 years, they should have enough income to pay for the increase. If they did not work for a company that gets 3%+ year over year annual pay increases, then this type of loan wasn’t for them.

I have a coworker and his wife in a secure aerospace jobs that did the 10 yr IO loan in 2004 and he and his wife gets at least the annual 3% increase each and every year. Now, they may be upside down, but they still will be able to afford the payment. I believe his means met his ends and may come out unscathed. My coworker had to move to get his kids into a better Jr High & High School. The 3 and 5 yr I/O loans will have problems under these specific conditions.

I highly doubt there is any 10 yr I/O loans available, I haven’t checked. I might actually consider it now that home values are somewhat down and if we are in for a high inflationary period. I would even put my bank money as a down…

Lucky In OC

[LuckyInOC]

Patb, I don’t see why there is only one class of buyer who will use an I/O loan effectively.

[quote=patb]it struck me there is only one class of buyer who will use an I/O loan effectively. Someone who by nature will have a very serious increase in their income soon. Recent graduates from med school, People starting new small businesses (Franchises), people in apprenticeship programs.

But that’s maybe 1-2% of all buyers. I/O’s are otherwise a tool for flippers. if you aren’t amortizing the debt you will see a big spike in
payments, and for what?[/quote]

For those with 10 yr I/O loans, I don’t see why they could not afford the payments in the future?
Assume when they purchased a home with $3800 payment at 30% debt to income ratio. This would be about $152k annual or $13.7k monthly household income. Not much of a stretch. Now, fast forward 10 years with at nominal 3% annual pay increases. The income now would be $204k annual or $17.0k monthly. There is $4k of additional income to pay the maximum $2800 increase to $6700. If the borrowers happened to paid all their bills in the 10 years, they should have enough income to pay for the increase. If they did not work for a company that gets 3%+ year over year annual pay increases, then this type of loan wasn’t for them.

I have a coworker and his wife in a secure aerospace jobs that did the 10 yr IO loan in 2004 and he and his wife gets at least the annual 3% increase each and every year. Now, they may be upside down, but they still will be able to afford the payment. I believe his means met his ends and may come out unscathed. My coworker had to move to get his kids into a better Jr High & High School. The 3 and 5 yr I/O loans will have problems under these specific conditions.

I highly doubt there is any 10 yr I/O loans available, I haven’t checked. I might actually consider it now that home values are somewhat down and if we are in for a high inflationary period. I would even put my bank money as a down…

Lucky In OC

[LuckyInOC]

[quote=paramount]Good labor isn’t cheap, and cheap labor isn’t good.

I’m sure if you paid enough, one or more of those applicants from google or qualcomm would jump ship. That’s the way the employment market should work IMO.[/quote]

Good, Fast, Cheap…

You can only pick two…
And the third will suffer.

Good & Fast – it won’t be cheap
Good & Cheap – it won’t be done soon
Fast & Cheap – it won’t work well

Lucky In OC

[LuckyInOC]

[quote=paramount]Good labor isn’t cheap, and cheap labor isn’t good.

I’m sure if you paid enough, one or more of those applicants from google or qualcomm would jump ship. That’s the way the employment market should work IMO.[/quote]

Good, Fast, Cheap…

You can only pick two…
And the third will suffer.

Good & Fast – it won’t be cheap
Good & Cheap – it won’t be done soon
Fast & Cheap – it won’t work well

Lucky In OC

[LuckyInOC]

[quote=paramount]Good labor isn’t cheap, and cheap labor isn’t good.

I’m sure if you paid enough, one or more of those applicants from google or qualcomm would jump ship. That’s the way the employment market should work IMO.[/quote]

Good, Fast, Cheap…

You can only pick two…
And the third will suffer.

Good & Fast – it won’t be cheap
Good & Cheap – it won’t be done soon
Fast & Cheap – it won’t work well

Lucky In OC

[LuckyInOC]

[quote=paramount]Good labor isn’t cheap, and cheap labor isn’t good.

I’m sure if you paid enough, one or more of those applicants from google or qualcomm would jump ship. That’s the way the employment market should work IMO.[/quote]

Good, Fast, Cheap…

You can only pick two…
And the third will suffer.

Good & Fast – it won’t be cheap
Good & Cheap – it won’t be done soon
Fast & Cheap – it won’t work well

Lucky In OC

[LuckyInOC]

[quote=paramount]Good labor isn’t cheap, and cheap labor isn’t good.

I’m sure if you paid enough, one or more of those applicants from google or qualcomm would jump ship. That’s the way the employment market should work IMO.[/quote]

Good, Fast, Cheap…

You can only pick two…
And the third will suffer.

Good & Fast – it won’t be cheap
Good & Cheap – it won’t be done soon
Fast & Cheap – it won’t work well

Lucky In OC

[LuckyInOC]

Classic TG…

[quote=temeculaguy]If i have to break out a credit card to view something on the internet, somebody better be naked.[/quote]

That made my week…
I think I will put that on a t-shirt…

Lucky In OC

[LuckyInOC]

Classic TG…

[quote=temeculaguy]If i have to break out a credit card to view something on the internet, somebody better be naked.[/quote]

That made my week…
I think I will put that on a t-shirt…

Lucky In OC

[LuckyInOC]

Classic TG…

[quote=temeculaguy]If i have to break out a credit card to view something on the internet, somebody better be naked.[/quote]

That made my week…
I think I will put that on a t-shirt…

Lucky In OC

[LuckyInOC]

Classic TG…

[quote=temeculaguy]If i have to break out a credit card to view something on the internet, somebody better be naked.[/quote]

That made my week…
I think I will put that on a t-shirt…

Lucky In OC

[LuckyInOC]

Classic TG…

[quote=temeculaguy]If i have to break out a credit card to view something on the internet, somebody better be naked.[/quote]

That made my week…
I think I will put that on a t-shirt…

Lucky In OC

[Author]

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