Pbartender
First Post
grimwell said:before we get to that other thread.... part of it is that they bought their house at say $120K and sell it for $250 and then buy a home worth $300... their loan amount is only $50K.
Not necessarily... Remember, you still have to pay off what's left of that $120K mortgage with the money from the $250K sale. If you've only paid off $20K of capital on that first house, then you don't have a $50K loan on that second house, you've got a $150K loan.
But that's what I was trying to get at. Around Chicago, here's what often happens (I know, because three different mortgage officers recently suggested it to me)...
Someone buys a $240K house on an interest only loan, hoping that they can sell it for $350K in a couple years. The idea it to use the $350K sale to pay off the $240K mortage, and then use the remaining $110K as a down payment on the house you actually want. The trouble that's happening right now is that it's really hard to sell houses... A lot of people are getting stuck in houses that they don't want and can hardly afford.
Anyway... That aside, if you can afford it, many of the suburbs of Chicago are great places to live. For the most part, they're quiet, safe towns with good schools.