- Jun 12, 2014
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Founding Member
Printing money isn't lending.
Mortgage rates
- Thread starter Zambo
- Start date
- Jul 29, 2014
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Lending is printing money....how do you think lending works? You think physical money is moved from one place to the other when someone takes out a mortgage?....it's how money is "created"
- Jun 12, 2014
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Founding Member
Sort of.
When someone takes out a mortgage, that amount is actually transferred to another party.
The source of that money though is other people's deposits at the bank that issues the mortgage and the Fed does set the amount of deposits that the banks actually have to keep on hand instead of lending. And yes, that does create money.
In this case though, the amount of money created is a fairly static multiplier driven by the reserve ratio, and the reserve ratio isn't changed all that often.
- Jul 23, 2014
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- Sep 8, 2014
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This would tank the housing market real quick!
Even if Federal Reserve Chairman Jerome Powell and his cohorts stopped hiking policy rates soon, the 30-year fixed mortgage rate still would climb to 10%, according to Christopher Whalen, chairman of Whalen Global Advisors.
Even if Federal Reserve Chairman Jerome Powell and his cohorts stopped hiking policy rates soon, the 30-year fixed mortgage rate still would climb to 10%, according to Christopher Whalen, chairman of Whalen Global Advisors.
- Sep 8, 2014
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- Jul 29, 2014
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Actually the effect is even more dramatic than that due to fractional reserve banking.....you're not silly enough to think you are the sole owner of those treasuries or MBS you hold either, are you?
Believe it or not treasuries and MBS are often simultaneously "shared" on more than one balance sheet....but don't tell anyone because it's supposed to be a secret.
- Sep 8, 2014
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Mortgage rates top 7% for first time since April 2002
The rate on the average 30-year fixed mortgage hit 7.08%, up from 6.94% the week prior, according to Freddie Mac.
- Jul 29, 2014
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- Jul 24, 2020
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Interesting, isn't it sort of the same concept of a ballooning interest rate?
Every little bit helps the first time home owner hoping that rates are better in a few years and can then refinance.
- Nov 19, 2014
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It is similar to an ARM. Why not buy down the rate for the entire life of the loan? If you stay in the house long enough you will clearly make out in the long run. The answer is most people don;t have the money to buy down the rate for the life of the loan. All this says is no one has any extra for anything.
- Jul 29, 2014
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It's a seller or lender concession tool although some qualified borrowers can buy down points this is totally different. This and rent to own/lease option will be the new big things to keep houses moving until rates get back under 5%. Not sure if you've seen Diivy or any of a number of new services for this but they are sprouting up quickly over the last 4-6 months. I think alot of them are hedge fund spinoffs from all the buying they did over the last 2 years.
- Nov 19, 2014
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No I have not, but my experiences tell me that when this shyt springs up, it is a sign. Just like in the late 90's when every afternoon radio show was a call in stock show, or in 2005-2006 every weekend radio show was a housing show. Well that has started again, so if history tells us anything..........
Homebuilders say they're on the edge of a steeper downturn as buyers pull back
Homebuilders say 2023 is going to bring an even sharper downturn in the market, as high interest rates scare away buyers.
www.cnbc.com
- Jul 29, 2014
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Hell if I was a homebuilder I would have already taken my profits and closed up shop after the killing they've had over the last 4 years. The rest of us(existing homes) will take the 10-20% ride downward while the next batch of Millie's get conditioned by the media to 7-8% rates until next March/April and then decide they will jump out the window of their 3rd story apartment and offer up one of their children to make sure they get the "new"5% rate....No I have not, but my experiences tell me that when this shyt springs up, it is a sign. Just like in the late 90's when every afternoon radio show was a call in stock show, or in 2005-2006 every weekend radio show was a housing show. Well that has started again, so if history tells us anything..........
Homebuilders say they're on the edge of a steeper downturn as buyers pull back
Homebuilders say 2023 is going to bring an even sharper downturn in the market, as high interest rates scare away buyers.
- Nov 3, 2017
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That's a hopelessly naive view.
- Nov 19, 2014
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Wells Fargo mortgage staff brace for layoffs as U.S. loan volumes collapse
The U.S. housing market has been on a roller coaster, taking off in 2020 thanks to easy-money policies, then grinding to a near halt this year as rates rose.
- Jul 23, 2014
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I just locked in today (this morning) on a new home loan in Texas - 6.75%/30 year fixed - with an option to buy down the points.
But...I don't think we'll be there long enough to take advantage of the buydown.
The builder's mortgage broker is paying $20k towards the closing costs and the realtor is kicking in almost $12k.
All we have to bring to the table is the 20% downpayment.
the only thing left to do is... just sell our house in Denver. should be easy after the announcement today, right? :)
But...I don't think we'll be there long enough to take advantage of the buydown.
The builder's mortgage broker is paying $20k towards the closing costs and the realtor is kicking in almost $12k.
All we have to bring to the table is the 20% downpayment.
the only thing left to do is... just sell our house in Denver. should be easy after the announcement today, right? :)
- Jul 29, 2014
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Can you wait till spring to sell?
- Jul 23, 2014
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we might be able to ... may be able to rent it out for a while until the rates come down
houses here in this neighborhood in Denver don't stay on the market for more than three or four weeks.
but... with the latest rate hike(s), don't know for sure.
