Sorry but that is a symptom of massive ignorance. Not knowing an incredible important aspect of your largest financial decision is like not know what days you are suppose to show up for work. There is a minimum amount of knowledge people should have that sign a mortgage. I think at least 34% of mortgage holders need to read this blog. Ok, I probably alienated all of them, so if that is the case then they should read some of the blogs we list in our blogroll.
There is a big problem in that logic - it could maybe make sense if you had good reason to believe rates will be lower in the future than when you took out the loan (but that is a very questionable). I don’t know why someone would think that in the last couple of years - the risks have been much better than rates would go up a few hundred basis points than down that much. Basically I can see someone that is very financially savvy using an adjustable mortgage to qualify and if they know they will move in a fairly short period…
Related: Learning About Mortgages - Mortgage Defaults: Latest Woe for Housing - How Not to Convert Equity - 30 year fixed Mortgage Rates
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Additionally, you lock in a large part of your housing cost (you still have maintenance and taxes but you do not have every increasing rent. Now ever increasing rent is not a certainty but for many it is very likely rent will go up on average over the long term…
25% Total stock market index (~Wilshire 5000)
25% international stocks
20% small cap stocks
…
The numbers really are astounding. How lame were the decisions of banks and mortgagees that nearly 1 in 40 mortgages are in default (and that number likely increasing in the next year to much more…
The Mortgage Bankers Association (MBA) really expects anyone to pay any attention to their opinions. They have someone managed to create a threat to the economy so large that $90 a barrel oil is not the threat to the economy people are worried about.
FDIC Chairman, Sheila Bair, has been encouraging banks to take such action and instituted such action on the mortgages the FDIC acquired when they took over Indymac…
[...] Teaching Children About Money Matters - Ignorance of Many Mortgage Holders - Financial Illiteracy Credit Trap December 16th, 2008 by John Hunter | | Tags: Financial [...]
[...] Ignorance of Many Mortgage Holders - How Not to Convert Equity - Your Home as an Investment - Nearly 10% of Mortgages Delinquent or in [...]