U.S. CitiesCity-Data Forum Index
Go Back   City-Data Forum > General Forums > Real Estate > Mortgages
 [Register]
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
View detailed profile (Advanced) or search
site with Google Custom Search

Search Forums  (Advanced)
 
Old 11-04-2007, 02:41 PM
KB4 KB4 started this thread
 
Location: New York
691 posts, read 1,263,537 times
Reputation: 703

Advertisements

How do lenders determine their rates for the short term vs the long term? One of the lenders I've been looking at currently has the same rate for 10-year ARM and 30-year fixed. I've never seen this before, the rate for the ARM has always been lower. To me this doesn't even make sense because I feel like who's gonna take the ARM if they can get the same rate fixed for 30 years. Does this mean that the lender is almost sure that mortgage rates will fall considerably in the next 10 years?
Rate this post positively Reply With Quote Quick reply to this message

 
Old 11-04-2007, 02:51 PM
 
20,194 posts, read 21,584,223 times
Reputation: 9234
No, the lender is betting that YOU will think that it is going to fall after 10 years but nobody really knows (it may rise and you can bet the banks are going to try and make it rise through the usual channels - corrupt policitians) and when everyone is going into fixed rate, they go back to their friends, the politicians, to lower the interest rate so everyone would go to ARMs. Oh wait, that's happening now. What a coincidence.

Last edited by evilnewbie; 11-04-2007 at 03:02 PM..
Rate this post positively Reply With Quote Quick reply to this message
 
Old 11-04-2007, 07:56 PM
KB4 KB4 started this thread
 
Location: New York
691 posts, read 1,263,537 times
Reputation: 703
Quote:
Originally Posted by evilnewbie View Post
No, the lender is betting that YOU will think that it is going to fall after 10 years but nobody really knows (it may rise and you can bet the banks are going to try and make it rise through the usual channels - corrupt policitians) and when everyone is going into fixed rate, they go back to their friends, the politicians, to lower the interest rate so everyone would go to ARMs. Oh wait, that's happening now. What a coincidence.
I'm not quite sure I follow your logic.
Rate this post positively Reply With Quote Quick reply to this message
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.

Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.


Reply
Please update this thread with any new information or opinions. This open thread is still read by thousands of people, so we encourage all additional points of view.

Quick Reply
Message:

Over $104,000 in prizes was already given out to active posters on our forum and additional giveaways are planned!

Go Back   City-Data Forum > General Forums > Real Estate > Mortgages

All times are GMT -6.

© 2005-2021, Advameg, Inc. · Please obey Forum Rules · Terms of Use and Privacy Policy · Bug Bounty

City-Data.com - Contact Us - Archive 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36, 37 - Top