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Heck no. Just think about it this game all of us have to play with banks when we need to make a major purchase. The banks act as if they are doing us such a big favor by telling us how we are going to get the best possible interest rate based on our fico score for a loan we have to pay back in most cases over 30 years. Who came up with that rule?
In my opinion, no mortgage should be longer than 15 years, and banks should use our highest fico score since we have to pay back 3 times our loan back to them in interest payments. This is why our economy is partly screwed up. IT'S ALL ABOUT GREED, AND OF COURSE THE TAX PAYER HAS TO FOOT THE BILL AGAIN AND AGAIN AND AGAIN AND AGAIN. WHEN IS THIS MADNESS GOING TO STOP? I get can answer my own question. When the USA's economy has collapsed.
Anyways, who ever promised us that life would be fair?
And you have the choice to have a 30 year mortgage...
most people don't take them because they can't afford the terms.
So rather than get what they can afford, they go 30 year. Which is definitely NOT the bank's fault...
My rule of thumb has been if I can't afford a 15 year mortgage than the house was to expensive. As far as credit scores, if I was the bank I would take the lowest score out of all three.
Why is it unfair? To me the highest is probably not right and the lowest is also not right... so go with the middle... Or personally, they could add it all up and take the average, I think that would be more fair... but the banks are here to make money and make as much of it as possible... If you don't like it, there are loan sharks who charge higher interest and its not based on your FICO scores...
Lenders now appear to be going back to more traditional lending practices(where the borrower could actually afford the loan they were getting) as opposed to the snake oil lending practices of the sub-prime era. I think it is perfectly reasonable for a lender to use the credit score that they think best predicts RISK. As long as this is tied into loan products that are financially sound for both the lender and borrower I don't see a problem.
Why is it unfair? To me the highest is probably not right and the lowest is also not right... so go with the middle... Or personally, they could add it all up and take the average, I think that would be more fair... but the banks are here to make money and make as much of it as possible... If you don't like it, there are loan sharks who charge higher interest and its not based on your FICO scores...
Yeah I like that better..at least they are looking at the average.
Anyways, who ever promised us that life would be fair?
And you have the choice to have a 30 year mortgage...
most people don't take them because they can't afford the terms.
So rather than get what they can afford, they go 30 year. Which is definitely NOT the bank's fault...
Most people can't afford a mortgage because of the way the mortgages are written. When you do the math, a 15 year mortgage is affordable for some people, and some people do take them who know about them. Some people also add more money to their 30 year mortgage's principal in order to pay them off early.
Heck no. Just think about it this game all of us have to play with banks when we need to make a major purchase. The banks act as if they are doing us such a big favor by telling us how we are going to get the best possible interest rate based on our fico score for a loan we have to pay back in most cases over 30 years. Who came up with that rule?
In my opinion, no mortgage should be longer than 15 years, and banks should use our highest fico score since we have to pay back 3 times our loan back to them in interest payments. This is why our economy is partly screwed up. IT'S ALL ABOUT GREED, AND OF COURSE THE TAX PAYER HAS TO FOOT THE BILL AGAIN AND AGAIN AND AGAIN AND AGAIN. WHEN IS THIS MADNESS GOING TO STOP? I get can answer my own question. When the USA's economy has collapsed.
So, don't play the game. Pay cash for everything. That way, you don't have to pay any interest, and you don't have to worry about how they figure out your credit worthiness.
I find it humorous that people make claims about how unfair it is that a bank will use this criteria or that one to asses a risk, and sometimes charge a higher interest rate, or refuse to make a loan, based upon those criteria. At the same time, they blame those same banks and their willingness to lend money to high risk borrowers for our current mortgage crisis. You can't have it both ways.
Lenders now appear to be going back to more traditional lending practices(where the borrower could actually afford the loan they were getting) as opposed to the snake oil lending practices of the sub-prime era. I think it is perfectly reasonable for a lender to use the credit score that they think best predicts RISK. As long as this is tied into loan products that are financially sound for both the lender and borrower I don't see a problem.
Here's the problem with them PREDICTING RISK. Customer A can have a fico score of 750, just because his parents were smart enough to make him an authorized user, thus inheriting years of his parents credit history. Customer A can be 25 years old with a fico score that high.
However, Customer B who is 35 years old can have a 680 fico score and because he lost his job 5 years ago and became delinquent on all of his accounts (even though he always paid his bills on time and used his credit reasonably), he has to slowly regain those points and be looked at as a higher risk, when in actuality he's not when you see the full picture.
The point I have been making is that customer A with the 750 fico score is not going to be looked at the same as customer B. Even though customer B's lower fico score isn't a result of him living above his means or not using his credit wisely. This so called risk factor is a way for the banks to make people pay higher interest rate and put YIELD SPREAD PREMIUM money in the brokers' pockets who have already charged you for getting the loan. Talking about getting over on the unsuspecting customer.
So, don't play the game. Pay cash for everything. That way, you don't have to pay any interest, and you don't have to worry about how they figure out your credit worthiness.
I find it humorous that people make claims about how unfair it is that a bank will use this criteria or that one to asses a risk, and sometimes charge a higher interest rate, or refuse to make a loan, based upon those criteria. At the same time, they blame those same banks and their willingness to lend money to high risk borrowers for our current mortgage crisis. You can't have it both ways.
Actually, you are right. But don't tell the banks that. They seem to bombard us with credit card offers over the years, and many Americans thought they were doing the right thing by opening bank or credit cards.
But I find it humorous that banks who made it sooooooooooooo easy for people, who shouldn't get bank cards or store credit cards in the first place and people who couldn't afford those sub prime mortgage loans ANYWAY argue that they have this formula to determine RISK when obvious if they were so concerned about risk, WHY ARE WE IN THIS ECONOMIC MESS NOW?
Unfortunately, tax payers, and those of us who played by the rules to get our homes the OLD FASHION WAY now got to bail YES THE BANKS AND WALL STREET out. CALL IT WHAT YOU WANT.
GREED has messed up our economy AS WELL AS THE BANKS LAXED LENDING PRACTICES. Our economy probably won't recover for AT LEAST another 15 years. That's how long it took our economy to recover from the GREAT DEPRESSION.
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