realtors could keep making their numbers

itrader | Jan 30, 2013 03:55 PM ET Mortgage rates are driven more by the 10yr bond rate than 30yr... The housing crisis started when ARMs increased from 13% of mortgages to 25% in one quarter due to loose standards so that banks, builders, and realtors could keep making their numbers. A much bigger impact on new mortgages will be rising home prices (5.5% national increase last year). This will put huge pressure on both government and commerce to once again go back to the loose standards that got us into the previous boom-bust if the rate of new home purchases fall.

llking | Jan 30, 2013 04:44 PM ET it`s a good idea to pay off your mortgage on the home you`re living in but not on your rental properties. Assuming if you have extra money to pay it off, it`s better to put those money to work and buy another rental property.

giofls | Jan 30, 2013 05:16 PM ET @Deano61: The best thing to do is refinance and keep the term constant. If you have 15 years left on a 30 year loan, re-fi to a much lower cost 15. If you have 10 years left, re-fi to an even lower cost 10. If you`re only 2 years into a 30, maybe another 30 makes sense. I don`t believe in chasing higher returns by leveraging your primary residence. It can work out, but for a lot of people it will turn into a disaster. It`s a very big risk unless you have the wherewithal to handle losing a job or a major market decline.

RadicalModerate | Jan 30, 2013 06:34 PM ET Ckoffend: You`re correct in all points. Beringer: You`re completely wrong long term. What will happen to you if you lose your job and your investments tank? You lose your house. Paying off your main residence is ALWAYS a good idea. Your system works best with rentals. JUDiamond: You`re an idiot, so much so, that I do not have enough space to explain it too you. Itrader: you`re correct in all points. glofis: Yepper, you are correct. If you must refi, do it this way.

BrianBallsOfSteel | Jan 30, 2013 07:07 PM ET Earth_Scientist | Jan 30, 2013 01:40 PM ET I don`t see how they can refi people at 3%; who would ever buy that loan (besides The Fed) ? The default risk has to be >3% over 30 years. It makes no sense. Why not normalize rates to about a 6% fixed mortgage for 30 years, and have the buyers bid what they can actually afford to repay (which will also lower the default rate) ? -------- dumbsh1t, if the seller qualifies at 3pct, why should they not do it? what happens to the loan afterward they take it out is irrelevant...to the borrower...so we should raise rates to 6pct in order to make the market more stable? your logic is all f1cked up...

stupid_liberal | Jan 30, 2013 07:07 PM ET Why doesn`t one of you know-it-alls talk about The Community Reinvestment Act, which Obama just juiced again? Oh, I know, because you think growth can be founded on increasing public debt, expanding government and endless monetization. RadicalModerate, since you are an expert on idiocy, explain how the idiot democrats will solve all problems... Fool. -Stu

BrianBallsOfSteel | Jan 30, 2013 07:11 PM ET Beringer | Jan 30, 2013 03:10 PM ET Yes, paying down the mortgage sooner rather than later is better, but rushing to pay it off in full at the expense of earning more money than you`d be saving is not really the best idea. ---------- if you are a decent informed investor, you have the right idea...you dont have to be warren buffet, just a non-idiot who reads up...

BrianBallsOfSteel | Jan 30, 2013 07:12 PM ET hey stu, why dont we talk about the Community Reinvestment Act? Because it is irrelevant to the discussion...thats why.

tarandfeathers | Jan 30, 2013 07:54 PM ET And when interest rates spike to 6% who is going to hold onto a 30 year mortgage that pays 3.75%?

BrianBallsOfSteel | Jan 30, 2013 08:10 PM ET tarandfeathers | Jan 30, 2013 07:54 PM ET And when interest rates spike to 6% who is going to hold onto a 30 year mortgage that pays 3.75%? ------ answer is ANYBODY WHO HOLDS ONE...LOL! you dumbsh1t... the price on that mortgage goes down...it is discounted against the current rate...so the net yield to the buyer of the mortgage is the same... you need to read up on mortgages/bonds...always a ready buyer of a mortgage at the right price...






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