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The payment ought be the same over the term of the loan. Teaser rates, forcing the borrower to accumulate more equity in the initial years ought be allowed, resulting in a significant savings for borrowers interested in moving in the short
term, and strengthening the risk of the loan through more principal paid.

For instance a 3% teaser rate for 5 years on a 4% fixed for the next 245 years, makes a blended rate of 3.98%, and lowers the monthly payment $1.67 per month on
$100,000 borrowed, or $8.35 per month on a $500,000 loan. Over 12 months this is
$100.20 savings per year x 250 years = $25,000; but that savings is realized by the borrower all in the first 5 years, bringing the LTV down to below 95%.

So while I presently have no opinion on adjustable rates _per se_, and certainly
teaser rates are attractive, the _payment_ ought to be fixed for the term of the
loan, allowing for no adjustment. Adjustable rates will therefore result in an adjustable term, perhaps of 150-350 years of which I have no opinion, except that
we need to focus on the 250 year term getting us down to less than $.02 different
from interest only per $100,000, or $.07-$.08 more than interest only per year, in
the absence of an introductory teaser rate.

So again, I hope that's not too confusing, fixed payments for the life of the loan
are the huge point to get here.

I did a little research, and while adjustable rate mortgages first became legal in
1982, they were not popular with banks until 2004 "to make monthly payments lower
when rates started rising." The mortgage meltdown will no doubt repeat itself if
this fallacious type of home lending and speculation at taxpayer expense is not corrected. https://en.wikipedia.org/wiki/Garn%E2%80%93St._Germain_Depository_Institutions_Act
https://www.thebalance.com/what-is-an-adjustable-rate-mortgage-3305811

The way that mortgage lenders lend, the axiom that those who can barely qualify should not go for an adjustable payment is not going to be followed in the least,
as they are doing all they can to just barely get the borrower in under qualifications and make that money. Thus an adjustable *payment* on a home loan
is basically pure evil, so far as I can tell.

From https://www.quickenloans.com/mortgage-rates :
"Adjustable rate mortgages (ARMs) offer lower rates than some other loan types. ARMs are a great option if you expect to sell your house or refinance before the
initial fixed-rate period ends. A popular ARM is the 5-year ARM, which is a 30-year mortgage with an initial fixed-rate period of five years."

And what if after 5 years the house is underwater and you won't be able to pay off
the loan?

I think we've already seen the effects of this buffoonery.

--- SoupGate-Win32 v1.05
* Origin: fsxNet Usenet Gateway (21:1/5)

XPost: ca.general, ca.politics, alt.california
XPost: alt.abortion, alt.drugs.abuse

On 12/7/2019 2:14 PM, Regulation Of Commerce wrote:

The payment ought be the same over the term of the loan. Teaser rates, forcing
the borrower to accumulate more equity in the initial years ought be allowed, resulting in a significant savings for borrowers interested in moving in the short
term, and strengthening the risk of the loan through more principal paid.

For instance a 3% teaser rate for 5 years on a 4% fixed for the next 245 years,
makes a blended rate of 3.98%, and lowers the monthly payment $1.67 per month on
$100,000 borrowed, or $8.35 per month on a $500,000 loan. Over 12 months this is
$100.20 savings per year x 250 years = $25,000; but that savings is realized by
the borrower all in the first 5 years, bringing the LTV down to below 95%.

So while I presently have no opinion on adjustable rates _per se_, and certainly
teaser rates are attractive, the _payment_ ought to be fixed for the term of the
loan, allowing for no adjustment. Adjustable rates will therefore result in an
adjustable term, perhaps of 150-350 years of which I have no opinion,

Actually, the rate can't adjust up or it will not be covered by the payment.

That would cause negative compound rates, and not work for the loan to ever be paid off, but only grow.


except that

we need to focus on the 250 year term getting us down to less than $.02 different
from interest only per $100,000, or $.07-$.08 more than interest only per year, in
the absence of an introductory teaser rate.

So again, I hope that's not too confusing, fixed payments for the life of the loan
are the huge point to get here.

I did a little research, and while adjustable rate mortgages first became legal in
1982, they were not popular with banks until 2004 "to make monthly payments lower
when rates started rising." The mortgage meltdown will no doubt repeat itself if
this fallacious type of home lending and speculation at taxpayer expense is not
corrected. https://en.wikipedia.org/wiki/Garn%E2%80%93St._Germain_Depository_Institutions_Act
https://www.thebalance.com/what-is-an-adjustable-rate-mortgage-3305811

The way that mortgage lenders lend, the axiom that those who can barely qualify
should not go for an adjustable payment is not going to be followed in the least,
as they are doing all they can to just barely get the borrower in under qualifications and make that money. Thus an adjustable *payment* on a home loan
is basically pure evil, so far as I can tell.

From https://www.quickenloans.com/mortgage-rates :
"Adjustable rate mortgages (ARMs) offer lower rates than some other loan types.
ARMs are a great option if you expect to sell your house or refinance before the
initial fixed-rate period ends. A popular ARM is the 5-year ARM, which is a 30-year mortgage with an initial fixed-rate period of five years."

And what if after 5 years the house is underwater and you won't be able to pay off
the loan?

I think we've already seen the effects of this buffoonery.

--- SoupGate-Win32 v1.05
* Origin: fsxNet Usenet Gateway (21:1/5)