House Broke

MSNBC.COM ^ | 8-8-06 | Jennifer Barrett

[SengirV]

That's a great example of stupidity.

[Hydroshock]

ping

[FreePaul]

...adjustable-rate mortgages...

Did anyone think that the rates would be adjusted to favor the borrower?

[Hydroshock]

In many over valued markets you will see a lot of this in the coming few years.

[BikerGold]

MSNBC.COM--highly reputable, honest, pro-American, pro-populist sourcw who never, ever obfuscate the truth /extreme s

[Diana in Wisconsin]

"We just couldn't afford the house anymore."

Dude? You couldn't afford that house in the FIRST place.

(I see stupid people. They're everywhere. They don't even know that they're stupid.) *Rolleyes*

[Hydroshock]

I hate to say this, but when you get an arm when the rates are at 40 year record lows, where do you think they are going?


Answer: UP!

[Vision]

bookmark

[soloNYer]

Shawn Howell gambled and thinks he lost. Would he have spent more money by selling after two years at a loss or by renting at nearly the same amount for two years?

[Loyal Buckeye]

Those who are being hurt by rising interest rates are miniscule in comparison to those who have been able to purchase homes due to low interest rates (fixed or variable).

Even those who lose their homes have the opportunity to regain their financial footing and purchase another home, one that they can afford.

[2banana]

Now rising interest rates are forcing them into agonizing financial choices.

Long term interest rates have gone up about 1%. They are still at historic lows. The real reason is that banks allowed people to borrow money on houses they clearly could not afford - this is the big change from 5 years ago.

[Jameison]

"Dude? You couldn't afford that house in the FIRST place. "

Yup.
Who ever heard of a guy buying a house with NO deposit down at all, and two mortgages?
Stupid as, stupid does.
But hey, it's Bush's fault as well. :)
Is this example the best the Bush-hating MSNBC could do?

[FreePaul]

Record low interest rates wouldn't seem to be the best time to take out an ARM. While some buyers are hampered by stupidity the average buyer generally doesn't have very much help in making major financial decisions or doesn't take advantage of what help is available. On the other hand he is dealing with an industry which spends hundreds of millions of dollars in research and bribing our representatives and other government officials.

[Jameison]

"Long term interest rates have gone up about 1%. They are still at historic lows"

Yup.
And they could even start coming down again, if the Fed continues to hold interests rates, or start sending them down, due to high oil prices causing a slow down in the economy.

[Always Right]

If he planned on living there 5 years, why not a 5-year ARM? A 1-year ARM is insane when a $300 increase is going to bankrupt you. Most people are in fact better off with an ARM, because most people don't stay in a house for 5 years.

[palmer]

That's a great example of stupidity.

Did you read the whole article? I think they were short-sighted and naive but I wouldn't call them stupid.

[SlowBoat407]

Rates high, or you know you'll be able to handle the shift in a couple of years, get an ARM. Rates low, lock it in with a fixed.

If you want to gamble, go to Vegas.

[satchmodog9]

people are really freakin stupid

[jwparkerjr]

The rising house payments due to rising interest rates are but a part of the picture. In many areas homeowner's insurance costs have double or tripled. Gas is almost twice what it was when he bought that house and his auto insurance rates have certainly gone up too. Even those with employer funded health care are seeing their costs skyrocket, in some cases going from a $500 a year deductible for the family to $2,000 a year for each covered family member, and the prescription co-pay go from $5 to $40 or more. And of course, everything else continues to creep up year after year. Very few people have been able to increase their earnings enough to keep ahead of the rapidly rising cost of making ends meet.