Is Buying a Home With a Higher Payment Worth It If I Plan to Refinance?

Is Buying a Home With a Higher Payment Worth It If I Plan to Refinance?

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[solominded]

Never made financial decisions based of a hope.

[Mathignihilcehk]

What if you buy the home now, hope rates go down, and then rates DO go down... BUT so does the valuation of your home. Your home is now worth 40% less, but rates are 2% again. Your $500, 000 home is now worth $300, 000, and despite paying 20% down, you are still $100, 000 underwater on your home. How do you refinance that? Answer: You don't. You can't. You must keep paying on your underwater home or start over from zero. So, do you try to keep paying it off? Now, what if you lose your job while you were paying more than 25% on your home? You get a new job that offers 25% less income, can you afford to keep making the payments on your home? No. You MUST get a job that pays as much as your last one. And what if we end up in another recession (which many are predicting). Job market collapses.

Gamble on your retirement or your savings and at worst you just extend your retirement age. Gamble on your home, and you end up homeless. There are some investments you should be SERIOUSLY conservative with. Home ownership is one of them.

[ThePatriots]

Nothing good starts with "I planned on"...

[JakeSpradlin]

Risky, but I agree that it’s okay to get on the home ownership train. Your income will likely increase weather or not you can refinance later

[meddings]

I was a teen in 2007/8 before the housing market crash. Had an older coworker that just bought a house and i asked him what kind of rates/loan he got.
He said he got an interest only loan. I was so confused, he was never going to pay off the loan? He told me it was simple, the house value will go up and then, because he is paying so little, when he sells it, he will make more money.
Plans with variables we cant control arent plans, they are hopes, and sonetimes its more gambling.

[baileykonop]

this video is exactly what i need tonight, thank

[joshalecusan]

I think people who simply want to refinance in the future need to understand that it actually costs quite a bit to refinance. I think most people think you just press a button and all the sudden you have a new rate and it's not that simple. It's typically a pretty penny..

[reaper-sztm]

This doesn’t make sense. How can I save 25% of my income for retirement, spend 25% of my gross income on the mortgage, and still have money for all the other lives expenses and money for fun stuff. I think a better ratio would be don’t let your mortgage be more than 25% of your net pay. That leaves a lot more breathing room

[marshallwise]

Amazed how so called financial advisors don't understand the financing of mortgages. Amortized mortgages are front ended with interest. Like 60-70%. So "stated" interest rates are the last thing to consider.

[michaelswami]

Somebody needs to help Reebs understand that these are not historically high interest rates on mortgage