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Same thing with student loans. Is there any wonder why college is so much more expensive?
are you really saying there is a relationship between student loan indebtedness, and tuition costs ????
I know of far too many who took loans (in the name of college costs) simply because they were able to, and then took that money and bought cars/jewelry/vacations etc.
are you really saying there is a relationship between student loan indebtedness, and tuition costs ????
I know of far too many who took loans (in the name of college costs) simply because they were able to, and then took that money and bought cars/jewelry/vacations etc.
I am really saying it. When credit increases, so do prices. We are in the current economic mess because our brave and wise government and financial leaders do not understand this. Alas, their solution is MORE CREDIT!
are you really saying there is a relationship between student loan indebtedness, and tuition costs ????
I know of far too many who took loans (in the name of college costs) simply because they were able to, and then took that money and bought cars/jewelry/vacations etc.
Of course there is. If the government had made student loans so easy to get, colleges could not have increased their fees as much.
Simple supply and demand, access to loans increases the demand at each price point shifting the curve up.
Same thing happened with housing and easy loans.
It's the entire reason behind the government programs like "money for first home buyers" and so on, shift he demand curve up to increase the price.
A 3.5% drop in prices is orders of magnitude more likely than a 20% drop in prices. It's analogous to the difference between 1 standard deviation and 6 standard deviations.
Given the current environment, with the market predicting a drop of 15% or more, 3.5% down loans will almost certainly end up underwater.
You're being way too kind. It's almost 6 times as much if the PDF is constant from a 0.0% move to a 20% move.
In reality, it's quite a bit more than 6 times as likely (e.g. 1 sigma versus 6 sigma or .5 sigma vs 3 sigma or whatever)
Yes, but 6x is big enough to be obviously a stupid risk. So why complicate things for people who can't even see that there's more risk to start with...
(just but a house already... you'll be glad you did)
you might have a point i asked some straight forward questions which got ignored and side stepped, but i like to give people chances so here they are again, but from what i have seen in this thread, i wont hold my breath.:
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no, by how much are FHA loans more likely to default. that is what you were talking about in that post, FHA defaults and its impact correct? you were saying that FHA and VA loans Quote:
" Because low and no down payments are what got us in this financial collapse in the first place....
If you are upside down on a loan, you are better off walking away (aside from credit score/history issues - which mean you aren't unless you are upside down by a large amount). Clearly requiring 3.5% instead of 20% increases the chance of the loan ending up upside down at some point. "
how much more likely are they (FHA/VA LOANS) to default than conventional fixed rate loans??
plus do you know the difference between an fha 30 year fixed and a 100% financed ARM??? you seem to think they are the same thing or very similar.
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another ??
:explain then how paying of your student loans is "making poor financial decisions"? explain please how serving the country in the armed forced is "making poor financial decisions" (VA loans are also government backed and also require around 3.5% down)?
(just but a house already... you'll be glad you did)
you are 100% correct, the main point of this whole thing is simple: if prices drop on the same properties by another 25% and rates go up to 7% interest rate, it basically will cost the same over the life of the loan.
But people have already dropped prices by 10-35% so are they likely to drop them another 25% as rates go up, or will they simply sell them to all the people buying now? is that 25% drop promise worth missing out on all the options and taking the sloppy seconds???
in truth if you didnt buy a month ago, you didnt gain anything by watching the rates go up, prices CAN drop to make up for the rate increases but so far they havent dropped enough that the waiters came up ahead of the takers. last month i saw 6 condos in montclair for less than 150K. checking on trulia now, i see just one.
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