141–150 of 297 posts
Earlier quoted context omitted.
There is nuance that interest changes over the period of the loan. In or so 2007 some people took 5% Euribor + margin loans, but only some years after it was negative. And since negative euribor was not written to contracs some paid less interest than was margin.
Not typical in the US where many/most? mortgages are fixed rate for the entire 30 years
There’s a ticking clock right now for 5/1 ARM. If rates stay elevated then many are going to be out of a home.
Sure, but who was opting for an ARM in the last 5 years?
If rates were to go up to 8%+, a lot of homeowners here would be unable to meet their repayments. The basis of the stress testing we've been doing since 2014 was only whether people could afford their mortgage if rates rose by 3%.
Earlier quoted context omitted.
Most of the people I speak to who locked in Current renters will have lower potential to save on a monthly basis, only to get 30-40% off on their first home with a >7% interest rate. If you sum the lost savings from rent plus the additional interest payment, it is uncertain whether that is the best strategy. That is also assuming real estate prices in certain regions wont hold stronger value, which they probably will…
Not selling doesn't magically make your house keep it's market value. As long as there's someone in the vicinity selling at a lower price your house would lose value either way. And there's always someone selling.
The risk here is a home's value dropping a lot, putting somebody underwater, and then life circumstances forcing them to sell. That's bad. But for the rest of us that happily make our mortgage payments it doesn't mean a thing if the spam emails from Zillow show a new number.
There’s a ticking clock right now for 5/1 ARM. If rates stay elevated then many are going to be out of a home.
Earlier quoted context omitted.
Corporate buyers are one of the many exacerbating factors, and I think that’s what most are saying when they say corporate home buying is a problem. In other words, there aren’t enough homes and corporations sitting on some percentage of them is making the situation that much worse.
I don't understand how a corporate purchaser is worse than any other investor; I live in an area with almost only single family homes, and a huge fraction of them are investor owned and rented out. The small time land lords have a huge variance in how well they behave, but I'm not sure why corporate landlords are worse.
They will hold the reins on their houses and take some losses if need be, but ride it coolly till the end...
My 2C.
Thanks
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A credit union I used for my house which had competitive rates has very good rate for new auto loans. It is about 4.09% for 4-5 years.
I'm sorry are you saying 4.09% is a good rate? Anything 2% or lower is a good rate, my house was 4% back in 2019.
In the context of the last four years it is not. It is "merely" good.
I do not consider the last four years to be the foundation on which to start building assumptions.
Even in the context of the last four years, for auto loans 4.09% is only above average for about six of the last 48 months (Sept 2021 - Feb 2022).
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> you think people are going to pay mortgages they are massively underwater on? Yes? Why wouldn't you? It seems pretty short-sighted to just put your arms in the air, give up, get foreclosed on, lose your home, and have your credit be absolutely wrecked for the next 7 years. Just keep making your payments and ride it out. The market will eventually recover. I think the only reason to give up is if you fell for the sc…
Concur. As a relatively new first-time homeowner (a year), do you know whether a mortgage lender requires higher or additional insurance coverage for an underwater property?
If the loan goes underwater later, usually because of market conditions, maybe because of creative loan features, then the lender has no leverage to require anything.
Earlier quoted context omitted.
> you think people are going to pay mortgages they are massively underwater on? Yes? Why wouldn't you? It seems pretty short-sighted to just put your arms in the air, give up, get foreclosed on, lose your home, and have your credit be absolutely wrecked for the next 7 years. Just keep making your payments and ride it out. The market will eventually recover. I think the only reason to give up is if you fell for the sc…
Concur. As a relatively new first-time homeowner (a year), do you know whether a mortgage lender requires higher or additional insurance coverage for an underwater property?
You are required to have insurance when you have a loan on a property. The insurance rates could actually drop due to lower cost to replace your house.
Underwater property just means you owe more than it is worth. However, if your interest rate is low, you might be paying less than someone who is not underwater.
How this effects housing prices: Housing prices are determined largely by what payments people can manage to make. At 3.22% (the approximate rate on Jan 1 2022) A $2000 payment can finance $462,000. At 7.7% (what google says is the current average rate) it would only finance about $280,000. At 12% (my personal guess at where rates will peak in about 18 months before quickly returning to around 7% for several years af…
> At 12% (my personal guess at where rates will peak in about 18 months before quickly returning to around 7% for several years after that) it will finance $195,000. Would you share some of the thought process for how you arrived at that guess? This is not at all my area and while I can understand how someone might guess "rates will continue to rise for at least a while longer" I don't really have an understanding of…
Secondly, we've seen rates higher than 12% during periods of much less inflation and a greater ability for the fed to curb inflation via interest rate increases (specifically the early '80s).