ARM home loans just reached 2008 levels

Headlines within the next year - “A Farewell to ARMs”

They're not nearly as predatory as they once were, and if you're expecting rates to drop, you'll be saving around 1% until they do.

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Why do people put themselves in this position?

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Because they WANT a house but can't afford one..so they get suckered in by lenders who paint a picture that interest rates will never go up and then they think they can refinance before the rates jump. And for those who do something like that, they probably save a boatload of money...but for those who don't time it right or play the game right it's like playing financial Russian roulette.

I’m legit curious as to what differences are in new ARMs?

So if the fed raises the base rate 1%, what is a typical ARM doing?

A 30 yr was 3% a yr ago. It’s around 5% today. Assume the worst.

What could seriously go wrong buying now?

1) Historically inflated real estate prices
2) ARMs with a short fuse after which rates become floating - typically interest-only so no principal is paid and therefore no equity gained
3) Rising living costs
4) Living "paycheck-to-paycheck" - so real no savings or financial cushion
5) The market on the cusp of a historic crash where retirement funds are at risk of being decimated - again no financial cushion

Need I go on?

Yes - but what is the alternative? Renting? Where landlords will jack up the prices in our so-called "trickle down" economy?

Need a place to raise your family unless you qualify for low-income housing.

In California, rent for a month then declare yourself as a squatter.

Legal proceedings will be such an issue that you can either get paid to go away or get months of rent for free.


Scummy as hell but a viable tactic in a state with fricked up laws.

ARM’s are stupid because the holder is taking on all the risk. If rates go up, you’re screwed. If they go down, yeah, your rate will drop but you could also refinance and achieve the same thing without the risk.

And anyone that was making accurate predictions that interest rates would go to all time record lows and stay there for 10 years is either a financial genius who made billions in the market or a degenerate gambler who got lucky.