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Guest LongBlackKilt

American Journo

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Guest LongBlackKilt

Grauniad

...I was paying 5.625% on my primary mortgage of $333,700. That was pretty low, given all the obvious machinations to avoid documenting my income. But I was also paying a sky-high rate of 8.5% on my second, "piggyback" loan of $80,300. My total monthly payments would be about $2,500 a month for the first five years. After that, my interest rate and monthly payments on the first mortgage would probably jump significantly.

"But don't worry," Bob said, adding what almost everyone was saying. "The value of your house will be higher in five years. You'll be able to refinance."

As I walked out of the settlement office with my loan papers, I couldn't shake the sense of having just done something bad ... but also kind of cool. I had just come up with almost half a million dollars, and I hadn't broken a sweat.

The icy slap of reality hit me two weeks into 2005. I walked out of the Times's Washington bureau and crossed the square to my bank. I had a bad feeling about what the ATM would reveal about my balance, but I was shocked when I looked at the receipt: $196. We were broke. My stomach churning, I called Patty. "We are out of money," I snapped, skipping over any warm-up chat...

Now read on...

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Grauniad

Now read on...

top idiot logic...dont worry in 5 years about the loan you wont be able to afford, you take out another to cover it.

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