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Started By
Message
re: ARM home loans just reached 2008 levels
Posted on 5/18/22 at 4:11 pm to the_truman_shitshow
Posted on 5/18/22 at 4:11 pm to the_truman_shitshow
quote:
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?
That’s why housing economists are once again on high alert: The pandemic’s housing boom has seen home price growth far outpace income growth. Over the past 12 months, U.S. home prices are up 19.8% while private sector wages are up just 4.8%. The historically hot job market can’t keep up with the historically hot housing market.
LINK
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Posted on 5/18/22 at 4:12 pm to the_truman_shitshow
quote:
Yes - but what is the alternative? Renting
How about getting a normal frickin mortgage? The rate savings on an ARM is not all that significant or worth the risk.
This post was edited on 5/18/22 at 4:13 pm
Posted on 5/18/22 at 4:13 pm to NOLAVOL16
The people doing this shite are likely ones who don’t have a down payment large enough or can’t get good enough credit for loan they can afford.
Which means they have no fricking business being in the buying market as opposed to renting.
Which means they have no fricking business being in the buying market as opposed to renting.
Posted on 5/18/22 at 4:16 pm to teke184
Is the down payment requirement different for an ARM? I didn’t think so. Granted I haven’t looked at them because the concept is so stupid but I wouldn’t think the DP would change just because of the rate fluctuation.
Posted on 5/18/22 at 4:19 pm to NASA_ISS_Tiger
quote:
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.
Do you also blame college loans on schools and the Federal government or on the students who took out the loans?
Posted on 5/18/22 at 4:32 pm to Jjdoc
some are saying that soon you will only be able to get an ARM
This post was edited on 5/18/22 at 4:33 pm
Posted on 5/18/22 at 4:40 pm to ninthward
“You will own nothing and like it.”
Posted on 5/18/22 at 4:44 pm to ninthward
There are incorrect assumptions in this thread.
Very few home loans are true ARMs. Home equity loans are ARMs
1st mortgage loans that are arms are all hybrids meaning they have a fixed rate for a time and then it floats. 5x1, 7x and 10x1 are the most common. I really haven’t seen hybrid arms in the market for the last 5 years until the last couple of months.
If someone has had a a hybrid threat just reset, then it’s on them for not refinancing when rates had a 2 handle for 30 year loans.
Very few home loans are true ARMs. Home equity loans are ARMs
1st mortgage loans that are arms are all hybrids meaning they have a fixed rate for a time and then it floats. 5x1, 7x and 10x1 are the most common. I really haven’t seen hybrid arms in the market for the last 5 years until the last couple of months.
If someone has had a a hybrid threat just reset, then it’s on them for not refinancing when rates had a 2 handle for 30 year loans.
Posted on 5/18/22 at 4:46 pm to Jjdoc
Didn’t we already do this a few years back?
Buy a house that you can afford with a fixed rate.
Simple.
Buy a house that you can afford with a fixed rate.
Simple.
Posted on 5/18/22 at 4:52 pm to NASA_ISS_Tiger
quote:
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.
It’s risk management in the end. ARMs aren’t bad if you get into one at the right time. I’d stay away from one now. Even a 10/6.
We are at historic lows for mortgage rates. I wouldn’t take out a loan banking on interest rates going lower than historic lows.
Posted on 5/18/22 at 4:52 pm to teke184
quote:
You would think that people who were in the finance market in 2005-2008 would be waving red flags left and right.
But it will be different this time!
Posted on 5/18/22 at 5:02 pm to Jjdoc
quote:
quote:
The share of ARMs made up 10.8% of overall loans last week, according to MBA, the highest point since March 2008 and more than doubling the 4.4% of purchase application activity for the week ending January 27.
Take from that what you wil
Credit Default Swaps! Get'cher Credit Default Swaps right here! Step right up, and bet big on another crash! Swaps! Get'cher Swaps!
Posted on 5/18/22 at 5:02 pm to fjlee90
Damn 2.25% 30 yr fixed less than a year ago. Why would anyone have gotten an ARM? Are the credit score requirements lower?
Posted on 5/18/22 at 5:07 pm to rb
I did everything but get on my hands and knees begging two relatives to not do this.
They did it anyway and now both hugely regret it.
They did it anyway and now both hugely regret it.
Posted on 5/18/22 at 5:12 pm to timdonaghyswhistle
Can't fix stupid.
Posted on 5/18/22 at 5:20 pm to Jjdoc
quote:
Take from that what you will
That most of those loans will end in default...That's my take.
Posted on 5/18/22 at 5:22 pm to Jjdoc
You do know that ARMs aren’t what caused 2008
Or are you that dumb?
Or are you that dumb?
Posted on 5/18/22 at 5:44 pm to rb
ARMS are not necessarily bad. I know people that had ARMS with the intention to refinance when rates dropped but their ARMS rates were better than the fixed rates for nearly ten years.
If mortgage rates go up then I guarantee you the alternative lender offering are going to make a return. All those hedge funds buying properties over market price are going to want a piece of the mortgage $$$ at 8%+.
If mortgage rates go up then I guarantee you the alternative lender offering are going to make a return. All those hedge funds buying properties over market price are going to want a piece of the mortgage $$$ at 8%+.
Posted on 5/18/22 at 6:48 pm to theRealJesseD
quote:
You do know that ARMs aren’t what caused 2008
Liar loans, mostly ARMs, being sold as deeivatives, caused 2008.
When the ARMs went up, liars bailed, and derivatives crashed.
Posted on 5/18/22 at 7:30 pm to fwtex
quote:
All those hedge funds buying properties over market price are going to want a piece of the mortgage $$$ at 8%
Even the ones where the buyer doesn’t have enough money to make payments on 8+%?
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