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A 30-Year Trap: The Problem With America’s Weird Mortgages
(www.nytimes.com)
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this post was submitted on 19 Nov 2023
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Yeah, the last time the lenders pushed Adjustible Rate Mortgages as a way for borrowers to be able to afford a home with cheap monthly payments it turned out fucking great! Lots of people were able to buy the house of their dreams and the economy flourished for the next decade!
Oh no it didnt. A shit ton of people lost their homes and the banks and mortgage industry pulled a fast one, lied, and hid the evidence when found out. Oh and the economy took a shit!
C'mon it worked out for the banks though!! The ones that are still around, anyway....
I took a combo loan, one 10 year ARM, and a 20 year fixed. I know I probably won't get a better deal when my rates inevitably increase at year 10, but saving almost 1.5 percent over ten years is nice. Hoping to have it paid off by year 15, so 5 years at a higher rate should be okay for now. Short-term arms are crazy.
If your in the US you should have refinanced in 2021 if it was an option. It's cheaper for me to pay the minimum on my home loan than it is to pay it off. Inflation is significantly more than my mortgage interest rate.
Hopefully it works out for you, but I'd be legit terrified of the moment that loan becomes adjustable rate.
And we still have 8.8 years roughly, so we're trying to pay what we can before we reach that point. It should give us time. Our ARM and fixed arw actually for a 20 year pay off. We could refinance later, but goal is to have the fixed paid off and 75 percent of the ARM paid off at year ten, then that tives us roughly 5 years for the rest.
I purchased in 2022 right before the major increases happened, well, in the middle. I'm in at 4.25.
imagine