bc818

Fannie, Freddie and the 4.5% Mortgage Myth

(1) Buying a house as two components: price of the property and the price to finance it. However, the only price anyone ever cares about is their monthly payments which are a composite of both. Therefore, if the price of the property stays the same or increases slightly and the price to finance it drop tremendously, the overall monthly payments are lowered.

(2) 4.5% is sustainable if the Fed Funds rate is 1% or lower. Welcome to Japan and ZIRP because its going to stay here for awhile.

(3) Very true, but eventually they're going to have to allow people to refinance. All of those door busting ARMs banks sold with the idea of raising rates later might just have to become fixed at the lower rate.

Keep investing in penny stocks FNM and FRE. They're akin to paying more taxes and the Govt is not above taking charitable donations.