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Rick..Maybe I am just old-fashioned, but every succeeding payment of a standard amortizing loan has a tiny bit less interest and a tiny bit more principal. After a few years, the percentage of the principal becomes meaningful. An interest only has no principal payment and at the end of, say, five years, all one has is 60 receipts of interest paid and no equity. Having been in the real estate and financial planning business for decades (retired now), I have never seen someone fail if their goals were realistic and considered. Adjustable rate mortgages can, and do bite people who are unprepared in the a$$. Not everyone is comfortable with no equity in real estate; in essence an interest only loan is equivalent to rent and worse if the market has a downturn. It is the same risk as buying stock on margin and then having the market go through a "correction". And, some of the financial gurus are prediction that what has happened to date is merely the start of the roller coaster ride. I, for one, am happy as a clam to have no debt, a nice place to hang my hat, and a pile of equity should circumstances demand it.
Maybe I am old-fashioned, thinking that it was MY responsibility to make sure my needs would be taken care of in my "golden years".
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Bob S. former owner of a 1984 silver 944
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