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Good luck with your special brand of economics--I got better things to do than teach you macro-econ.
Good luck to you -- but I feel there isnt much you can teach me but i am willing to listen. Maybe were we differ is I am smart enough to know that i dont know everything. When i speak with clients or give advice to a person, I dont look at the big picture, i focus on the client or the person asking for advice.
I have to give a shout out to sanity of people that LIKE ME AND VICTOR have choosen ARMs in the past.
I currently have a fixed rate mortage with 30 year term and a rate under five and a half percentage. I got into that FROM AN ARM that was higher by almost 1.5% It was not all that long ago that fixed rate mortgages were about DOUBLE where the ARMs were.
Of course it is STUPID to agree to any sort of financial decision you do not understand. CURRENTLY the discount for an ARM is not large enough that it makes sense to consider IN MOST CASES, and folks that ONLY qualify for an ARM are going out an shaky limb just BUYING any house so it is NOT the TERMS of the loan that will kill them SO MUCH AS the fact they are shopping for something they probably don't have the resources to comfortably afford.
For folks that CAN comfortably afford a home with a fixed mortgage AND HAVE A GOOD UNDERSTANDING OF THE consequences of an ARM changing they can keep a TON of money in their pocket and if they have any brains at all they can use that money much better than a MORTGAGE LENDER...
I have to give a shout out to sanity of people that LIKE ME AND VICTOR have choosen ARMs in the past.
I currently have a fixed rate mortage with 30 year term and a rate under five and a half percentage. I got into that FROM AN ARM that was higher by almost 1.5% It was not all that long ago that fixed rate mortgages were about DOUBLE where the ARMs were.
Of course it is STUPID to agree to any sort of financial decision you do not understand. CURRENTLY the discount for an ARM is not large enough that it makes sense to consider IN MOST CASES, and folks that ONLY qualify for an ARM are going out an shaky limb just BUYING any house so it is NOT the TERMS of the loan that will kill them SO MUCH AS the fact they are shopping for something they probably don't have the resources to comfortably afford.
For folks that CAN comfortably afford a home with a fixed mortgage AND HAVE A GOOD UNDERSTANDING OF THE consequences of an ARM changing they can keep a TON of money in their pocket and if they have any brains at all they can use that money much better than a MORTGAGE LENDER...
I am with you. Not much benefit with ARMS right now but many lenders are offering rates under 4% for them. Currently a 30 yr fixed rate is around 4.75%.
I'd suggest calculating ALL of your monthy expenses along with your payment schedule for your student loans and credit card debt. Your monthly housing expenses (mortgage, insurance, property taxes, utilities, HOA fees, planned maintanance..plan on it!, should figure to less than 1/3rd of your monthly net income. Ideally after all monthly obligations are paid for all other debt & living expenses (food, clothing,transportation, entertainment), one should be able to save 25% of his/her income.
You have a small window left with the extension of the Obama gift (from all taxpayers) of the up to $8,000.00 first time homebuyer rebate. This is instant home equity if used correctly, or it could pay off 50% of your student loans!
If you are a member of the military, or an honorably discharged veteran, *or* the child or grandchild of a military officer, join USAA. They use Fannie Mae guidelines (PMI on less than 20%, 10% down required in declining markets, 5% possible in others) and have the lowest PMI in the private market.
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