Interest rates?
- Thread starter Jarod
- Start date
Cancel 2016.2
The Almighty
That was my point. We are still near the highs. Despite going through a recession caused by that bubble bursting, despite 9/11, despite two costly wars, despite the complete ineptitude of the Reps and Dems in DC.... despite all of that, median income is still near our highs.
Now, due to interference from the government, skeptical lending practices and indiviudals buying more home than they could afford... we have had another bubble burst. This time on the real estate side. Yet unemployment is still under 5%.
You don't count Afghanistan as costly enough?
They raised rates to cool inflation and the housing markets.. They went overboard by about 2 points. So expect them to come down over the next few quarters.
seems to me that the fixed market rates did not go up at anticipated from the rate raising efforts. This is telling that the banks(especialy the non brick and morters) are still making some money even when the fed is raising the rates.
What does that mean? Id say that its likely they are buying foreign backed bonds at far lower rates. Perhaps consolidating a few billion at a time in fixed rates and acquiring a bond at like 2% from china.
seems to me that the fixed market rates did not go up at anticipated from the rate raising efforts. This is telling that the banks(especialy the non brick and morters) are still making some money even when the fed is raising the rates.
What does that mean? Id say that its likely they are buying foreign backed bonds at far lower rates. Perhaps consolidating a few billion at a time in fixed rates and acquiring a bond at like 2% from china.
I thought many adjustable mortgages were tied to the fed rate? Am I wrong? I have only ever delt with fixed rates personally.
uscitizen
Villified User
Nope it is pretty cheap. comparitively speaking.
Yes most are tied into prime. I have a HELOC that is prime minus 75basis.
BUT many banks now borrow money from foreign countries to fund there loans. And china i know dishes out loans that are greater then 1B for like as little as 2%. meanwhile the bank turns around and give us a mortgage for 6%
AHH that complicated and lucrative banking industry.
I was enjoying watching someone I know sweat it out. Achually I feel kinda bad for them, but they keep breathlessly comming to me and saying...
The Fed is going to lower rates this month, "they" just anounced it!
Then when I go to the news I cant find such a thing. Knowing these people the "they" is likely some talking head on Fox news.
The Fed is going to lower rates this month, "they" just anounced it!
Then when I go to the news I cant find such a thing. Knowing these people the "they" is likely some talking head on Fox news.
honestly i dont think its much of an issue. most responsible middle class people with the hybrid teaser loans can refinance to a 30year fixed at less then 7% still. If they purchased 2 much house well shame on them and they should sell it for something smaller.
The people I know, have four kids, and they likely cant sell for what they owe, althought they dont realize that yet. They cant afford the new mortgage as the arm just expired and now they are going from paying 6.5% to something like 11%.
When they do loose this house, one way or another, they will not be able to afford a house big enough for the 6 of them!
I have a $206,000 Mortgage at 5.8% on a house I believe is worth about $325,000, the neighbor sold 2 years ago for $415,000. I have some credit card debt and some real student loan debt, but those rates are all below 7% so I am happy. I am paying off the CC that is at 7% but the rest, I think Ill inevst the money and pay it off as slowly as they let me.
Cancel 2016.2
The Almighty
They tend to be tied to the prime rate (discount rate) rather than the fed funds rate. But normally the Fed will lower and raise the two rates together, so the ARMs are highly correlated with the Fed Funds rate as well.
They could likley refi to a fixed 30year for 6.5% today. then no 11%.. unless of course they have shitty credit