It is much more ominous. We can talk about rate hikes and economic collapse all we want. But none of that talk can even scratch the surface of reality. When you or your neighbours are losing your houses, or fighting for food in a manufactured food shortage.
Here in Canada virtually everyone in my circle of friends has about 500k in mortgage debt. People with variable rates paying 1% last year would be paying about $400 in interest costs a month, plus about $2,000 in principal, so $2,400 total. In the last year that rate has jumped to 2.5%, meaning their payments are now $3,000 per month. We’re barely even getting started, if rates get to 20% like in the 70’s that payment will increase to over $10,000 per month. A LOT of people are going to lose their homes.
This! ☝🏻 I don’t understand this concept ever, but especially after the housing crisis in during Obama’s first term. It’s a no brainer. We’re in a fixed mortgage w/ an insanely low interest rate and we were planning on doing a new build soon and moving. Well again, it’s a no brainer w/ the mortgage rates steadily increasing and set to increase even more throughout the year, there’s no way we’re going to attempt to move and lose our low interest rate.
i think bad credit or anticipation of market improving or ability to unload the house. it's not ideal, but somexs when ppl have bad credit this looks like a better deal. (never had one myself, but thinking that is the logic)
Lots of people had them, particularly when rates were 1% and fixed was 2%. Standard mortgages here only offer 5 year fixed rates, so even amongst those that got fixed rates, 20% come up for renewal on any given year. Most people who have their mortgages coming up in a year or so have no idea what kind of pain they are in for.
I was in this crowd and had to pay $5k penalty to switch lenders and lock in a better rate last fall.
It’s a game that’s rigged so that a good chunk of people will fail, and everyone gets squeezed.
Just woke my husband up (he’s the money manager) and asked him if we had fixed vs variable on our house and warehouse… he gave me the stink eye for waking him up, but so glad to know all our mortgages are fixed at 3%! Whew! I can sleep now! And the warehouse will be paid off in less than two years 😎. Thanks for listening!
I did a couple years ago. It dropped my interest rate dramatically. All this was so I could double and triple my principal payment. I dumped tax returns and my annual bonus in there as well. Paid my house off three weeks ago. Mortgage debt free. Bought the house in 2006 for $225k. It was the best way for me to max out my principal payments so that I could finish the mortgage off. It only made sense by doing the math and maximizing my principal payments to put me on a 3 year payoff. The interest rates were so incredibly low, it worked in my favor.
It worked out for me, but it was a unique circumstance where maximizing my principal payments was paramount for a finite repayment plan to pay the house off before the ARM kicked in. I would only recommend it for paying off the mortgage within a set window before the rate can vary. After years of paying off my last divorce, all I have wanted to do is pay off all my debt and be completely in the black. My intention was to save like crazy for the last 10-15 years of my working career. If i can swing it, I want to retire in 10 years well before I hit 60. Sell my urban home and buy 50-60 acres in the foothills of the mountains and spend the rest of my life fully self sufficient. Right now, I have no remaining revolving debt. If I can't save up to buy something, I'm not buying it.
You have to pay interest because the banks bribed politicians to give them the ability to print and loan money. It has also distorted the system, ramping up the prices for everything and forced almost everyone into debt.
HOW are people still signing up for ARMs after what happened in 2008??? There was even a very popular Hollywood movie about it and still morons are buying more house than they can afford and agreeing to adjustable rates. Fucking staggering.
Might have been my thread. I wasn’t dismissing potential shortages but questioning whether the sudden attention by the MSM on food shortages was fear mongering, because whenever they get involved in an issue you know there’s more behind it.
It is much more ominous. We can talk about rate hikes and economic collapse all we want. But none of that talk can even scratch the surface of reality. When you or your neighbours are losing your houses, or fighting for food in a manufactured food shortage.
Here in Canada virtually everyone in my circle of friends has about 500k in mortgage debt. People with variable rates paying 1% last year would be paying about $400 in interest costs a month, plus about $2,000 in principal, so $2,400 total. In the last year that rate has jumped to 2.5%, meaning their payments are now $3,000 per month. We’re barely even getting started, if rates get to 20% like in the 70’s that payment will increase to over $10,000 per month. A LOT of people are going to lose their homes.
This! ☝🏻 I don’t understand this concept ever, but especially after the housing crisis in during Obama’s first term. It’s a no brainer. We’re in a fixed mortgage w/ an insanely low interest rate and we were planning on doing a new build soon and moving. Well again, it’s a no brainer w/ the mortgage rates steadily increasing and set to increase even more throughout the year, there’s no way we’re going to attempt to move and lose our low interest rate.
fixed rate, 30 year beats inflation.
ARMs can be fixed rate for terms such as seven or 10 years, and are now underwritten much more carefully than they once were.
i think bad credit or anticipation of market improving or ability to unload the house. it's not ideal, but somexs when ppl have bad credit this looks like a better deal. (never had one myself, but thinking that is the logic)
Lots of people had them, particularly when rates were 1% and fixed was 2%. Standard mortgages here only offer 5 year fixed rates, so even amongst those that got fixed rates, 20% come up for renewal on any given year. Most people who have their mortgages coming up in a year or so have no idea what kind of pain they are in for.
I was in this crowd and had to pay $5k penalty to switch lenders and lock in a better rate last fall.
It’s a game that’s rigged so that a good chunk of people will fail, and everyone gets squeezed.
Just woke my husband up (he’s the money manager) and asked him if we had fixed vs variable on our house and warehouse… he gave me the stink eye for waking him up, but so glad to know all our mortgages are fixed at 3%! Whew! I can sleep now! And the warehouse will be paid off in less than two years 😎. Thanks for listening!
Yeah. Canada is weird. There are basically 5 banks that have an oligopoly, and they march in lockstep. There’s no real “choice”
I did a couple years ago. It dropped my interest rate dramatically. All this was so I could double and triple my principal payment. I dumped tax returns and my annual bonus in there as well. Paid my house off three weeks ago. Mortgage debt free. Bought the house in 2006 for $225k. It was the best way for me to max out my principal payments so that I could finish the mortgage off. It only made sense by doing the math and maximizing my principal payments to put me on a 3 year payoff. The interest rates were so incredibly low, it worked in my favor.
It worked out for me, but it was a unique circumstance where maximizing my principal payments was paramount for a finite repayment plan to pay the house off before the ARM kicked in. I would only recommend it for paying off the mortgage within a set window before the rate can vary. After years of paying off my last divorce, all I have wanted to do is pay off all my debt and be completely in the black. My intention was to save like crazy for the last 10-15 years of my working career. If i can swing it, I want to retire in 10 years well before I hit 60. Sell my urban home and buy 50-60 acres in the foothills of the mountains and spend the rest of my life fully self sufficient. Right now, I have no remaining revolving debt. If I can't save up to buy something, I'm not buying it.
You have to pay interest because the banks bribed politicians to give them the ability to print and loan money. It has also distorted the system, ramping up the prices for everything and forced almost everyone into debt.
Aaaaaand who owns the banks, hmm?
Exactly; the banks truly have NO skin in the game.
HOW are people still signing up for ARMs after what happened in 2008??? There was even a very popular Hollywood movie about it and still morons are buying more house than they can afford and agreeing to adjustable rates. Fucking staggering.
ARMs can be fixed rate for terms such as seven or 10 years, and are now underwritten much more carefully than they once were.
Might have been my thread. I wasn’t dismissing potential shortages but questioning whether the sudden attention by the MSM on food shortages was fear mongering, because whenever they get involved in an issue you know there’s more behind it.