With the Feds raising interest rates...

[Kalbi]

Originally posted by: dullard

Originally posted by: Kalbi
dude...you exchanged for 1 cent worth of gum. you didn't lose sht

Yes, I did gain 1 cent of gum. But you lost 1 cent of gum. It is still net zero.

dude you're an idiot.

You: House $100

Me: $0

Total in our economy: $100

I borrow $100 (magically get it from the bank)

I pay you $100, I get $100 house

You: $100

Me: $100 House

Total in our economy: $200

Wow magic, $100 was created.

This is as simple as I can explain.

 

[dullard]

Originally posted by: Kalbi
dude you're an idiot.

You are the one who can't understand simple math. Have a good day.

 

[Kalbi]

Originally posted by: dullard

Originally posted by: Kalbi
dude you're an idiot.

You are the one who can't understand simple math. Have a good day.

unfortunately, it's not simple math numbnut

try reading edit

 

[BoberFett]

If you hung onto that gum for 10 years and found a buyer who really liked stale gum who was willing to pay $0.02 for the gum, the original owner netted $0.01, and the new owner now owns $0.02 worth of stale gum. Should he then choose to hang onto it for another decade and find another buyer willing to purchase it for $0.03, he also netted $0.01, and the new owner possesses $0.03 worth of stale gum.

Long term, real estate is not a zero sum game.

 

[BoberFett]

double post

 

[pmoa]

I find this topic somniferous...

 

[dullard]

Originally posted by: BoberFett
If you hung onto that gum for 10 years and found a buyer who really liked stale gum who was willing to pay $0.02 for the gum, the original owner netted $0.01, and the new owner now owns $0.02 worth of stale gum. Should he then choose to hang onto it for another decade and find another buyer willing to purchase it for $0.03, he also netted $0.01, and the new owner possesses $0.03 worth of stale gum.

Long term, real estate is not a zero sum game.

Ah, but that is the problem. If I had held on for 20 years instead of 10 years, I would have netted $0.02 and the middle man would have netted $0.00. So by selling early, I lost that $0.01 of future gains.

Basically, the deal with the middle man was a bad deal on my part. The middle man gained an additional $0.01 that I could have gained. I lost $0.01 of future gum value.

 

[Kalbi]

Originally posted by: dullard

Originally posted by: BoberFett
If you hung onto that gum for 10 years and found a buyer who really liked stale gum who was willing to pay $0.02 for the gum, the original owner netted $0.01, and the new owner now owns $0.02 worth of stale gum. Should he then choose to hang onto it for another decade and find another buyer willing to purchase it for $0.03, he also netted $0.01, and the new owner possesses $0.03 worth of stale gum.

Long term, real estate is not a zero sum game.

Ah, but that is the problem. If I had held on for 20 years instead of 10 years, I would have netted $0.02 and the middle man would have netted $0.00. So by selling early, I lost that $0.01 of future gains.

Basically, the deal with the middle man was a bad deal on my part. The middle man gained an additional $0.01 that I could have gained. I lost $0.01 of future gum value.

😕 ok now you're just messing with us. no one is that stupid.

 

[DBL]

Originally posted by: Noirish

Originally posted by: Kalbi
No, not for that reason. Adjustables have rate caps.

yes, i believe they can raise as much as 2% on you in one year.
people with arm will get burned pretty bad once rates start moving north fast.
fixed rate ppl are safe though.

..which has the potential to ruin a lot of people. If you have a 1.2K/month mortgage (say 1K interest and .2k principal) at 4% and it were to go up to 6% 1 year after the fixed term ends, it would represent a 33% increase in interest payment. So your 1.2K/month payment would balloon to 1.53K or a 28% increase. It wouldn't necessarily end there either.

 

[HBalzer]

What is worse about arms is lets say you have a 3/1 arm, do you know what the 1 is? It means in the 4th year the rate can be very volatile and jump very high very quick from say 4.5% to 9%.