Originally posted by Merkhttp://www.reuters.com/article/businessNews/idUSL2474133320071024?feedType=RSS&feedName=businessNews&rpc=23&sp=true
Feel free to drop us some numbers on those two recessions.
If you do find yourself trying to be honest enough to search for facts to back up your statement, you'll find the last recession was at the end of Clintons second term.
(dated oct 24, 2007)
http://findarticles.com/p/articles/mi_kmcio/is_200204/ai_kepm294379
Originally posted by RagnorakI can't figure out how this point in your post can add up.
You seem to be missing the point.
By slashing the interest rate so much to unrealistic levels in 2001 (after the bursting of the dot-com bubble), the government promoted heavy borrowing (because it was so cheap). As soon as interest rates reached realistic levels again, people couldn't afford repayments. The cut promoted mortgage lenders to borrow low, ...[text shortened]... such a complex thing to sub-prime borrowers while washing the Fed reserve clean of blame.
D
"By slashing the interest rate so much to unrealistic levels in 2001 (after the bursting of the dot-com bubble), the government promoted heavy borrowing (because it was so cheap)."
I get this part: Interest rates slashed - promoted heavy borrowing - because the interest rate "was so cheap." I am with you to this point.
"soon as interest rates reached realistic levels again, people couldn't afford repayments."
You lost me here...those borrowers had already locked in at the low rate...A rise in interest rates would have no effect on their payment unless they refinanced...that would be an awfully stupid thing to do.
Originally posted by MacSwainI think he was refering to arm's
I can't figure out how this point in your post can add up.
[b]"By slashing the interest rate so much to unrealistic levels in 2001 (after the bursting of the dot-com bubble), the government promoted heavy borrowing (because it was so cheap)."
I get this part: Interest rates slashed - promoted heavy borrowing - because the interest rate "was so che ...[text shortened]... t on their payment unless they refinanced...that would be an awfully stupid thing to do.[/b]
Originally posted by MacSwainI don't know whether you have no experience of mortgages, or whether they work differently in America.
You lost me here...those borrowers had already locked in at the low rate...A rise in interest rates would have no effect on their payment unless they refinanced
Here, and as far as I was aware everywhere, you can only get a fixed rate on your mortgage for a couple of years max.
I'd be interested in hearing from somebody else, if a mortgage rate in America 25 years from now is fixed from the day of the mortgage.
D
2 edits
Originally posted by RagnorakMortgages come in many varieties, The most commonly defaulted mortgage is the A.R.M, or arm. The arm has a set interest rate (usually below prime) for the first 5 years, and then is tied directly to the fed+ a given%, and can adjust monthly; but by most contracts not more that 1% per month up or down.
I don't know whether you have no experience of mortgages, or whether they work differently in America.
Here, and as far as I was aware everywhere, you can only get a fixed rate on your mortgage for a couple of years max.
I'd be interested in hearing from somebody else, if a mortgage rate in America 25 years from now is fixed from the day of the mortgage.
D
A fixed mortgage is fixed for the life of the loan; 10,15,20,25,30,and 40 years being the norm. Some fixed mortgages have balloon payments attached at the end. This results in lower monthly payments, but a huge bill loomong in the future. If you don't plan on owning your house for more than 4 or 5 years this and the arm can be a good option, as you will gain market equity, and payments will be reduced.
So, the rate of a mortgage is determined by the type of mortgage, and the duration. Read all contracts,and have them explained to you by a lawyer working for you.
ARM= adjutable rate mortgage
Originally posted by Ragnorakin the US, quotes for 15 and 30 year fixed rate mortgages are regularly quoted in the newspapers. the terms don't change.
I don't know whether you have no experience of mortgages, or whether they work differently in America.
Here, and as far as I was aware everywhere, you can only get a fixed rate on your mortgage for a couple of years max.
I'd be interested in hearing from somebody else, if a mortgage rate in America 25 years from now is fixed from the day of the mortgage.
D
more complicated options are available (balloon payments, ARMs, etc.)
here are rates:
http://www.sfgate.com/homes/
http://www.mtgeinfo.com/sanfran/cmr.htm
Originally posted by MacSwainSo it appears I was right.
You lost me here...those borrowers had already locked in at the low rate...A rise in interest rates would have no effect on their payment unless they refinanced...that would be an awfully stupid thing to do.
"In the third quarter of 2007, Subprime ARMs only represent 6.8% of the mortgages outstanding in the US, yet they represent 43.0% of the foreclosures started. Subprime fixed mortgages represent 6.3% of outstanding loans and 12.0% of the foreclosures started in the same period."
http://www.mbaa.org/
D
Originally posted by RagnorakYes, I purchased a home in the US under a 30 year, fixed rate mortgage. My mortgage payment is constant throughout the term of the loan.
I don't know whether you have no experience of mortgages, or whether they work differently in America.
Here, and as far as I was aware everywhere, you can only get a fixed rate on your mortgage for a couple of years max.
I'd be interested in hearing from somebody else, if a mortgage rate in America 25 years from now is fixed from the day of the mortgage.
D
Originally posted by Ragnorakpeople also go to casinos here.
So it appears I was right.
"In the third quarter of 2007, Subprime ARMs only represent 6.8% of the mortgages outstanding in the US, yet they represent 43.0% of the foreclosures started. Subprime fixed mortgages represent 6.3% of outstanding loans and 12.0% of the foreclosures started in the same period."
http://www.mbaa.org/
D
hey, casinos are legal in europe, too!