This entry was posted on Friday, April 13th, 2007 at 8:57 am and is filed under Financing, Lessons. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
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April 13, 2007
Today’s class started off slow with the instructor promising to teach us how the money supply in the country works. Our instructor lamented the painful 8+% interest rates of the late 70s and 80s that made buying a home difficult. Seeing how rates fell so drastically a few years ago, it would appear to be a no brainer to buy a home NO MATTER WHAT THE INTEREST RATE IS as long as you can afford the payments, because you will more than likely be able to refinance at some point.
It is intriguing to imagine what the home market would be like today with a 20%+ interest rate, yummy…
Many of my readers are probably already familiar with adjustable rate mortgages. These often allow you to pay a reduced payment for the first few years (often with the mortgage amount actually growing) then with a hefty rate adjustment once the original low payments ended. This can really hurt those who don’t fully understand how these work. I have personally found some mortgage companies try to trick me into using an ARM over a 30 year fixed.
After some time listening to the instructor reminisce on past rates, he suggested that we get 15 year loans, and that we use his brokerage’s mortgage company for getting our clients loans. Apparently, we’re just not going to do any better than to go through them. That’s pretty convenient if you ask me!
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