The Federal Reserve should stop buying 30-year mortgages.
If five-year term adjustable rate mortgages were used instead, as is very common in Britain, there would be no point in overpaying for a house to lock in a low interest rate.
Changing the length of new mortgages is better than raising interest rates.
They’re thinking about “tapering” purchases of all bonds. They won’t stop first with mortgages, they’ll do them in parallel.
“If five-year term adjustable rate mortgages were used instead, as is very common in Britain, there would be no point in overpaying for a house to lock in a low interest rate.”
Their typical mortgage is 25 years with even 40 years available.
“overpaying for a house to lock in a low interest rate.”
No one overpays for a house to lock in a lower interest rate.
You’re a millennial, aren’t you? Someone who knows nothing but read it on the Internet so it must be true.
” If five-year term adjustable rate mortgages were used instead, as is very common in Britain, there would be no point in overpaying for a house to lock in a low interest rate.”
Here they aren’t even doing the math. They are convinced beyond shadow of doubt because everyone else is doing it that they are buying cheap money with an inflation protected payment.
It is just one but I drive by a partially finished house nearly every day that has apparently run out of money and credit. Interested to see what happens.