"DSK" wrote in message
news
NOYB wrote:
I am paying interest-only on a 5-year fixed at 4.25%.

Pardon me for being blunt, but that's friggin' dumb. That's as stupid as
punting on 3rd and short. Do you *want* the economy to take a big chunk
out of your future?

Why is it dumb? I explained in detail why it works well for me. Why pay
interest on an asset that's appreciating at 10-20% per year?



... I really can't afford an $825k house (with a conventional mortgage)
while I am still paying off my business loan. But if I didn't buy when I
did, I'd never be able to afford it.

So why do you feel you need an $800K+ house? To show off? To impress your
trophy wife?


Because I wanted to be on the water. Boating access down here is hard to
come by. The parking spaces at the ramps are filled by 9am on the weekend.
Even if you get there early enough, you have to pay a storage place $100+/
mo. to store your boat on the trailer. Two largest marinas have closed in
the last 3 years stranding me and 500 other boaters without a space to keep
our boats. Renting private in-water slips for a boat my size runs
$300/mo...and the owner could decide tomorrow that he doesn't want to rent
to me anymore. I was keeping the boat in Ft. Myers Beach, and the seasonal
traffic was turning a 30 minute ride to the marina into an hour and a half.

Now, I hop in my boat and I'm in the gulf in 17 minutes from my back door.



... When my loan is paid off (in just under 5 years), I can easily
afford such a house.

In 5 years, a lot can happen. Including double-digit inflation and a real
estate crash... but in your case it sounds like a much less severe
scenario will still seal your financial doom.

So what. In 2009, my rate can begin adjusting 2 points per year, upto a max
of 5 points. The worst case scenario: I'll be sitting with a rate of
9.25%...which I can afford to pay since I won't have the $6500/mo. business
loan any longer.





... I look at like this: I'm effectively renting the house for 5 -years
(but with a tax write-off!)

Or tying a huge anchor around your neck for the rest of your earning life.

Not for the rest of my earning life. Just for another 4 1/2 years. Then I
can afford to start paying an additional $4000/mo in principal.



Did the banker who wrote your mortgage feed you this justification? Did he
give a shark-like smile as he did so?

No. I used Wells Fargo. I had to talk *him* into it.


A whole lot of people in California got a big chunk bitten out of their
hides by this beast. But hey, don't listen to me...


Thanks. I won't.



Those people weren't in the same boat as me.

Yeah, yeah, yeah. Hope springs eternal etc etc... unfortunately, so does
self-deception.


How many people can say with absolute certainty, that on September 20, 2009,
they will get a before-tax raise of $6500/month? I can.


I *hate* the fact that I have to spend as much as I do on
insurance...but it sure makes me sleep better at night.


Insurance is just legalized gambling. Think for a second... why do you
have to gamble so heavily on your own failure? If you weren't taking big
risks, you wouldn't need so much insurance.

And I would reap the rewards that go along with risk.


Personally, I wouldn't roll those dice with my own future, much less my
families. OTOH I handle a lot of stock market investments without a qualm,
and sleep very well indeed at night.

With good wishes

Thanks.