Hat tip to CM from Seattle, who sent us a great link on Seattle’s cooling housing market. I could not believe it when I read the story of Meridith McDonald, however, a new home owner in the Seatttle area.
Meridith would be my candidate for a high profile jury trial, as she obviously doesn’t follow current events. After seeing all the stories of "duped" buyers losing their homes to ARM resets and the hazards of rising house payments, I thought we had all pretty much come to the conclusion that rising mortgage payments are a Bad Thing. Not so Meridith:
Meredith McDonald recently found the house she wanted in Phinney Ridge, but she and the sellers were about $30,000 apart on the price.
"I knew I couldn’t get to the price point they were asking for," McDonald said on Thursday.
That’s when her mortgage broker suggested a buy-down of two percentage points in the first year and one in the second. The arrangement cost the sellers about $8,000 and allowed McDonald time for pay raises and to put some money away before the rate increased.
"It’s nice to have that time to plan," she said.
Question: If Meredith couldn’t afford the payment without the buydown, how much will she save over the next couple of years, even with the lower payment? What if those raises don’t materialize? If she can’t finance? If two years from now she can’t keep this home, who’s fault would it be?
