What Fed Moves Mean for Mortgage Rates

NO Bail outs for the GO GO Speculators

I qualified for a 400k + loan, which would have broken my back. There was a gorgeous Country French house on the lake I wanted, but I bought the small new house in the same neighborhood. Instead, I bought in 2004, a house for 168,000 and save 20k per year instead. Why should my taxes go up to help the guy that gambled that the 400k house was going to 800k? I dont get to share in his winnings when he bets right? Its just plain unfair to the savers of the world. And people in the ghetto shouldnt own houses, they should rent until they get the hell out of there.

Scott of TX @ May 01, 2008 01:46:52 AM

Never bet unless it's a sure thing.

Why should I, through the gov't, pay for your stupidity. If the gov't pays for these poor people that couldn't read the loan's ignorance would that be smart on anyone's part? About as smart as buying what you couldn't afford in the first place.

Hey, I want a new car and I'll send you the bill. About the same intelligence. More gov't means only more taxes. What about all those good tax deductions from the interest you are paying?

I am glad to see in the above comments that there are some people with the intelligence to put the truth in written form. I want to know why we heard no voices when the interest were low with the Overwhelming chance that interest would go up.

Is there no uncommon sense any more?

Edward of MS @ Apr 30, 2008 23:00:01 PM

Personal Finance 101 is Killing Americans

Most Americans, no matter what the education level, are failing miserably at Personal Finance 101. See, most high schools and even colleges don't teach personal finance. People don't understand how money works, and this is clearly evident by the thousands of stories we hear about everyday. Most Americans are just a paycheck or two away from bankruptcy. No savings (negative saving rate the past two years according to various sources) and the avg American has 8K of CC debt. A few basics would really help people out. Pay yourself first. Everybody should be saving 10% for retirement and if a homeowner, you should really have at least 5K in an emergency fund, 3K if renter. I know it's not easy, but we have to change our ways. Stop paying 18% on CC debt. At that rate the balance will double every 4 years based on the rule of 72. Compounding interest is a killer on CC debt. 72/18 equals 4. On the flip side, let's say you were earning 12% on an investment and your money was working for you. 72/12 equals 6. In 6 years your investment has doubled. Powerful!!! Get interest working in your favor and not against you. Another simple one for you. They advertise a sexy sports car at $500 a month lease for 12K miles a year. You have paid 6K for the car this year divided by 12K miles. That's 50 cents per mile, not including gas and repairs. Add that in and your somewhere around 70 cents a mile. CRAZY! Don't fall for the scams, run the numbers. Start saving early, like in your early 20's. If you build it into your budget from the beginning, you don't miss it. We have to make changes, especially for our kids, teach them about money, or we'll be doomed forever. I'm not trying to brag, but I've followed some pretty simple steps along the way. I'm 30, been saving diligently since I was 23, and I now have 150K saved for retirment, 20K in savings, 25K in college savings for kids. I have had a six figure income the past 4 years, but my spouse does not work and many dual income households approach 100K these days. Saving 10% per year is literally 10K year in the bank. It adds up quickly Please, America, we need to make some changes. It's like a diet, the first couple weeks or in this case months can be tough, but in a year from now, you'll feel great about what you're doing and probably finding it's not as hard as you think it is. Seek some professional financial advice if you have to.

Drew of OH @ Apr 30, 2008 22:57:33 PM

Govt Bailout

If the govt can bail out the banks who recklessly bet on risky loans, why shouldn't an average homeowner recieve some aid if needed. I find it funny that some freely attack those who were just trying to fulfill a dream of homeownership, to better thier lives, while saying nothing of the banks/mortgage companies who made these high-risk loans. I would say the average homeowner would rather skip meals, take on extra employment, or cut utilities rather than miss a mortgage payment. What about the banking industry? Years upon years of high profitability. Now the pendulum swings and THEY have their palms out. They have paid professionals to assess the risk of these loans, so why am I bailing THEM out? I'd rather help that guy working a 9 to 5, trying to keep a roof over his family's head, than these whiny, wealthy bank execs who'd slit our throats if they thought it would be a profitable venture....then again, pretty sure they'd get bailed outta that too...Stop focusing on the easy targets guys...

Ric of NY @ Apr 30, 2008 22:17:01 PM

Live within your means... old saying still holds true

Each of the comments before mine have their merits but the mortgage meltdown would never have happened had people been sensible. S E N S I B L E - a word that has all but disappeared from our vocabulary in recent decades. Sensible means reading the fine print, asking questions, researching and living within your means when it comes to houses and automobiles, the two biggest financed items a person has in their lifetime. I took out an 7 yr ARM at 4.25% in 2003, no cash out, just needed a lower payment to take me through the final years of being a stay at home Mom. I knew I'd go back to work before the 7 yrs was up so if I had to refi to a higher payment no problem - the key was taking no cash out even though I had $50,000+ equity in my home at the time.

I'll never forget the mortgage lender's face when he asked me how much cash out I wanted and I said none, and how much of a 2nd mortgage did I owe and I said didn't have one. He said no one had crossed his doorstep in a very long time that didn't have a 2nd mortgage and/or wanted the max cash out they could get with a refi. Being sensible will take you far in this life! I feel bad for the ignorant people who were probably taken advantage of but I do not have any sympathy for the people who just wanted to live like a big dog in a big house with the biggest flat screen TV out there and drive a fancy car or two -- you're paying your dues now!

Ann of NC @ Apr 30, 2008 21:58:50 PM

Gov't Bailout

For those of you who think that it is the government's responsibility of bailing out all you losers that bought homes you couldn't afford, you are plain stupid. It is the government's responsibility to protect it's borders, assure a solvent currency, protect it's people and uphold a standard law... not to bail out all you cry babies that bought homes you knew in advance you couldn't afford! But you went ahead anyway and bought these things hoping that your homes would appreciate and that you could refi out the equity like an ATM machine. But now that reality is setting in and you are realizing that you can actually lose money on a home, you are all crying. PATHETIC. I am glad you are losing your shirt. You've reaped enough money from all of us responsible people that understand cash flow and what it means to buy on credit. Grow up and take responsibility for your own actions!!!

OC of CA @ Apr 30, 2008 20:58:31 PM

Why doesn't the media address mortgage rates?

I cannot understand why the media will not address the how lowering the funds rate does nothing to lower interest rates. Alot of hot air spent discussing but no effort explaining that it has no impact on helping the individual consumer. We need lower interest rates on mortgages to spark refinancing and home buying. Not difficult to figure out! Let's not allow the rich to get richer and leave hard working consumer hanging dry with the latest interest rate cut!

MG of IL @ Apr 30, 2008 20:32:59 PM

Government Loan Bailout's

I say it's about time the govenment did something for it's people!!!!

of CA @ Apr 30, 2008 20:00:20 PM