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[–] 25349420? [S] 0 points 1 point (+1|-0) ago  (edited ago)

What everyone has to know about mortgages is that they can still be back stopped by probably less than 10% of their value in silver and gold. If you can get that much, you will probably keep your house and be able to pay any crazy local taxes.

The other thing to know is that the interest is PRIME PLUS [insert tiny percentage here]. When the US credit score gets down graded which will most certainly happen in a retaliatory way if not legitimately, your prime goes crazy.

The reason that mortgage rates can be so low is because the banks make money, not on mortgages, but on derivative products. They combine a bunch of different loans, estimate the likelihood of how much of those loans will be ever actually paid back and then they sell that bundle as a product for 90% of the expected return.

They are total morons about valuing the mortgages. For one thing, if someone cannot make a couple of payments, the bank rewrites the mortgage so nothing bad happened. That's fake. For another, the only context in which their prediction has any veracity would be if everything stays in a steady growth forever which is mathematically, physically and in every way impossible. That' why I say that economics is the study of the building of a firework while specifically ignoring and making fun of the idea that it could ever explode.

But setting that aside, you may have noticed that the banks just resold your mortgage to someone (probably the manager of your pension fund) in a lasagne with a bunch of other mortgages only the purchaser has literally no claim whatsoever to the value of your house even if you never make another payment after all. Or any of the other houses in the Mortgage-Backed Security. Meanwhile, they typed the money they originally lent you literally out of thin air but somehow you owe them payments and interest for ages. If you fail at any time to live up to your obligation, they get to keep the property AND the payments AND seek further damages from you if possible even though they made an illegal contract. A contract where all the obligations are on one side is not binding. It is well established law that a real contract has obligations on both sides.

If they can type money out of thin air, what do they need you for? I sort of already answered that but let's put it this way, banks need to show that they are collecting payments. The more payments they are collecting from healthy mortgages, the better they look at the banking conventions and when they show up to the window at the Federal Reserve for an overnight loan because they literally run their own business so badly that they are always broke and over extended.

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[–] 25350544? 0 points 1 point (+1|-0) ago 

Thank you for sharing your knowledge. It takes time to read it all but is well spent. I want to go research many of your statements not because I don’t believe them but because if I try to share them with anyone they will challenge me and I can only say some guy on the internet told me.

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[–] 25350633? [S] ago  (edited ago)

Anything that you would like to have better supported, just ask (as one source of research on anything of interest to you that overlaps with what's mentioned). That POTUS is doing something on actual Friday was mostly wishing and not as much reasoning or research but I should be able to point you at some resources that I found interesting on anything else.

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[–] 25350452? ago 

I'm good about making payments on time and having a healthy balance sheet and income producing investments. Beyond that I never studied finance too much.

What I know is my monthly mortgage payment when I refinance is going to be less than what i was paying in rent 15 years ago.

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[–] 25351930? ago 

When you refinance for another 30 years, you are taking your existing mortgage debt and extending it out. Monthly payment will of course go down.

Rent vs mortgage. Look at your mortgage statements. Payments for the first decade of your mortgage are mainly interest payments. When you refinance, you pay off your principle and all those interest payments made for years prior are like rent. Then you start the process again. Tally your accumlated interest payments if you want to make yourself sick.

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[–] 25350479? [S] ago 

Awesome. Totally valid unless you are losing something in the fine print. Read carefully.