Replies to post #308324 on Zeev's Turnips Patch-No Politics (ZEEV)

[AD]

40 yr mortgage, interest only, ARM. It's the scourge I tell you! imho, only select situations call for such measures. But when mainstream families, single moms, etc use these to own, they are putting themselves at grave financial risk . Sure 5 yrs ago it would feel a lot safer. But after this huge runnup in prices , and int rates nowhere to go but up...upside down in a home , foreclosures and bk will become more commonplace.
Careful out there!

gotta love those futures
http://www.cme.com/dta/del/globex.html

[Newly2b]

The argument here regarding 40-yr loans is similar to the arguments used a decade ago to convince people to lease instead of buy cars.

Unlike their parents, who bought their homes with the intent to pay them off and live in them forever, people today look at their mortgage payment as "rent", the cost of living there, so a lower monthly payment is more attractive to them than a 15-yr loan where the payment is higher but they own the property free-and-clear at the end while having paid much, MUCH less in interest over the life of the loan and built up their equity faster. I wonder what these same people will think when they reach 65 and are still paying "rent" . . .

Of course, the lenders love to write new loans to replace old ones because on these fixed-rate fully-amortized loans, the percent of one's payment that goes towards interest is highest in the first years of the loan (when the balance owed is highest), and decreases compared to principal payoff as the loan matures (and balance owed decreases). So who are these loans really good for, the homebuyer, or the lender? As usual, J6P has been manipulated and duped, the dope!

Newly

[osprey]

Wait till they have 40 year, adjustable, negative interest loans. They have 30 year such already today. I believe in the old days they called this lifetime debt slavery. That is progress for you.