Americans Collectively Owe Almost $1 trillion in Credit Card Debt.

I was referring to the adjustable rate mortgages specifically.

Dude, it's just like anything else. Are you against guns because some morons use them to kill people?

 

Yeah, but you're still gaining partial rights to the property all the time that you are building equity. They legally can't take that back unless you owe it and don't intend to pay. But it's that difference between good debt and bad debt. Loaning money is a great way to stimulate the economy, but there's something really wrong with the current system obviously.

 

I had one ARM loan, wow did that go from beng a very low interest rate to like over 10% in no time flat. I couldn't imagine it being on a full house, the interest when increased has gotta be a killer!

They still are pushing the ARM's like mad, the original mortgage on this new house, they wanted an ARM instead of us paying 20% down. It's like WTF why not pay the 20% down if I have it!

Now for refinancing several have also pushed an ARM when it's not even necessary! They get people with 'cash back', you know how people love walking away with cash, it falsely appears like you have something when in fact you have more debt.

 

Personally, I don't think you should buy a house unless you have at least 20% to put down. But that's just my personal opinion and I understand why people don't.

 

I would rather pay for my home in cash. Save up somehow to get the $250,000, or however much you need, and when you're ready, just pay for the house, and own the house. It is really simple.

If Americans did this with everything, they would not owe $910 billion in credit card debt. Do you people have any idea how much the credit card companies will earn in interest off of $910 billion?

The average interest rate on a credit card is 14%, this means the credit card companies earn around.........I don't know, it is just too many numbers, but it has to be hundreds of millions per month. The credit card companies are the winners.

 

So true! But if everyone though like you Tesla we would not be in the predicament we are in today would we. There is those who get it and live a debt free life and those who don't who live beyond their means, borrow to their teeth and become slaves.

 

I agree. Plus PMI is a killer in itself. If you can't afford the 20% down, it makes it that much more difficult to afford the house.

Problem with this is most americans would never own a house with this method. $250,000.00 today, by the time you save that houses will be $500,000.00 or more.

 

No, but our entire monetary system is messed up. You are right, the people who fail for the ARMs are morons, but the banks are also predatory lenders. There should be laws against giving people loans that you know they don't have the income to afford.

 

I can't really argue with that...but at the same time, I don't really care about those people.

 

And when you are done paying it off you still have property taxes which with inflation and appreciation will be maybe $5,000-6,000 a year. Add utilities and there you have it. Most Americans will never truly owned a property, thats a myth. All you have to do is look who is selling you the dream to realize that its just that a dream, in reality you will have to pay forever!!!

 

Man, I'm so glad that my mom was a Mortgage Loan Officer now that I look back on it. She always told me that if I kept my credit score high, I could do anything. She'd tell me stories of people that would come in and try to get a loan with $100,000 in debt and a credit score of like 400. Yikes!

I bought my first house when I was 22 and it was meant to be a fixer-upper if you know what I mean. Well, I did some work on it through the years (not as much as I had intended) and just sold it after 6 years and made enough to put a full 20% down payment on my new dream house this week! All my cards are paid off (and will stay that way), I don't ever buy new cars (why buy brand new when the value drops quickly and it's something that's bound to get dinged up). I'm 28 and technically have NO debt besides my new house..... My coworkers joke that I'm a BAD american because I have no debt.....

Most americans seem to only think of what they want right now, and not what saving and paying off your bills on time will actually do for you. This was bound to happen to our economy sometime because we can only float so long on "fake" money before it all comes crashing in. I have sympathy for those that bought a house and then got sick or someone died, making it impossible to keep up with the mortgage, but I don't have sympathy for the people I see come into my Mom's bank and would basically screw their child out of a future (no college or savings fund EVER) JUST so they can have a bigger and better house/car than the neighbor.....

I was also talking to a friend in Phoenix who says there are a few subdivisions where almost every single house in them is empty because of foreclosure. Wow!!! It really makes you wonder how many of these people actually researched their loan or asked questions so they knew what they were getting into.....

Our economy is just going to continue to get worse and we have nobody to blame but our GREEDY little selves.....

 

Yes to a degree I will agree with the 'predator' part, on the other hand those who can not afford whine and complain about banks not lending them the $$$. Want bigger and better than they can afford, where is the personal responsibility?

Also to the part of saving up enough $$$ before buying a house, renting is throwing your money away even more so than a mortgage

 

You may have want to pay back the loan, but if you lose the job, or the interest rate goes through the ceiling, you won't be able to.

You're right. But do you know why it is this way? Because of stinking inflation. Inflation caused by the Fed printing too many dollars into circulation. Inflation is a form of theft, and no one ever talks about it.

Ron Paul talks about it. Paul Craig Roberts talks about it. Inflation and debt go hand in hand. When the prices on goods go up, you have to borrow to get those goods, because your income can't afford it, and you end up in debt.

 

Exactly, its pretty simple actually. Most people can make good money doing this and that's why real estate has been one of the best ways to build wealth in this country.

 

I don't know, I would rather be living in an apartment right now than having an ARM that has gone up, and losing my house. The apartment sounds good to me.

 

Good for you. You definitely got it right. Stay away from debt!

Not true at all! Do your math.

 

I don't know if you guys realize this, but the price of a house should go DOWN over time, not UP. Think about it, it is basic economics. Are people more efficient at building homes today, or the 1920s?

The laws of economics state that as people become more efficient at producing products quickly, the price of those products should drop, not rise in prices. But we don't see that today, do we? We see the price of everything go up, and that is because of inflation.

Inflation eats up your savings, and that is precisely why I buy gold and silver. I could save $250,000 for a house, because if I put that money, or a portion of it, into assets that are inflation proof, my savings will maintain itself over time.

 

Good credit is a great thing.
Mine and my wifes credit scores are about as perfect as they can be. Loan officers actually usually can not believe how good the scores are for our ages.

That is the reason I was able to buy this new house, the original loan was based souly off my credit.

Absolutely no documentation on my income, no doc on my assets, nothing other than my credit score.

This included not having to sell my old house either, no conditions at all. Great credit is a spectacular thing to have

 

Hey Grim, when I worked at the bank, they fed us that same propaganda. They said, renting is throwing away money, why don't you get and ARM instead? Yeah, we see how well that went.

I bet the millions of Americans who lost their homes wish they had just stayed in an apartment.

 

Yep! Sounds about right.