Home Sweet Home

 

to sell the house in order to meet the terms of the loan. If you know that you are going to move before the balloon payment is due, then you can probably get a better interest rate with a balloon mortgage than you can with a fixed-rate mortgage. But tread carefully and read the fine print if you think this is the best alternative for you."

"Good enough. I have another question. Suppose your

job demands that you move every couple of years. Is home ownership still a good idea?"

"Another good question, Dave. It has absolutely nothing to do with anyone in this room, but it's a good question nonetheless," Roy acknowledged with a grin. "Even the staunchest of real-estate supporters would agree that, over a one- or two-year term, it's impossible to predict price movements. They would also agree that the cost of moving—closing costs, legal fees, commissions, time, et cetera—would tend to negate any gain in value even if there was one. And if there wasn't one—well, obviously, home ownership would have been a bad move. Also, if you're moving frequently, you're a house owner, not a homeowner. It takes time to make a place your own—"

"This is a longer ans—" Tom attempted to interrupt.

"In conclusion, I would say that if you know you are going to be moving within a brief period, buying a home is a debatable move unless your employer will indemnify you against financial loss caused by either a drop in property value or the aforementioned costs."

"The one thing you didn't talk about today, Roy, is the thing that our friends complain about the most—how do you come up with the down payment? Even if I did want to buy a home, it would take me years to come up with a twenty percent down payment," Tom admitted.