People are so damn stupid. When I purchased my home I was given all these options — actually, the one guy pushed them so much I said “goodbye”. I stuck with the traditional 20% down, 30 year fixed with an extra payment or two every year.
Why would anyone settle into something exotic mortgage like that??? Some of those mortgages had pre-payment penalities, too! Again, people are dumb.
Anyone who finances a home purchase with an adjustable-rate mortgage when interest rates are at or near historic lows is a moron. That's the time to lock in a long-term FIXED rate.
Agree....I refi’d my house twice since 1998. Both times were for lower interest rates or shorter terms. NOw more than half way through a 15 yr fixed 4.875% mortgage.
The only solution is for the gov’t to print more money and offer all these losers a fixed 30 or 40 yr mortgage at 4% or 4.5%, regardless of equity. Otherwise the downward momentum may be unstoppable.
Much as I hate gov’t intervention, I would rather see them invest in housing than banks or insurance companies or car companies. Soon, maybe the gov’t will own everything and all will be great.
People ARE dumb; or maybe their greed makes them dumb. Or their “it can’t happen to me, I’m invincible” hubris. I’ve told my kids; if you can’t afford a conventional fixed-rate mortgage with at least 5% down, you can’t afford a mortgage. An ARM is playing Russian Roulette with your home. Dumb.
Exactly, we went the conventional route and like you pay about 10% extra every month that is going to get us out a few years early. It is easy to do if you have no credit card payments (other than food and that is just so we get free airline miles) and no car payment.
§ 4. Misprision of felonyWhoever, having knowledge of the actual commission of a felony cognizable by a court of the United States, conceals and does not as soon as possible make known the same to some judge or other person in civil or military authority under the United States, shall be fined under this title or imprisoned not more than three years, or both.
My husband and I met a couple (he was retired USAF) who had moved to Miami and bought a $750,000 with one of these types of mortages. The wife didn’t work and he made about $57,000. Needless to say they didn’t stay in that home long.