Interest rates?? Gow hi will they go??

[JJ_BPK]

A tale of interest rates.. When Jean and I were starting out in 1973, I already owned a small 900 sq ft 2/1 home. I assumed the mortgage on a 1923 circa Addison Misner in Boca for $11,500 and we paid $103.00 a month mortgage, tax & insurance included. :]

Stacey popped up in 1975, then Shannon in 77, so we needed something bigger. We sold for $19,500 and purchased a 3/2 for $23,500. I forget what the mortgage was but the rate was near 10%. Around 1980 we took out a 2nd for AC and that rate was around 13%.

Jimmy Carter drove the rates up, but Reagan got stuck holding the current record at around 17-18 %

Net Net,, If you think rates are high now,,

You Ain't Seen Nothing Yet, BTO, 1974

https://www.youtube.com/watch?v=4cia_v4vxfE


I am sure Brandon will try his damnedest to beat the record.

[cbtengr]

Bought my first home in 83 with a VA loan, 12% interest happy to get it so cheap.

[Box]

how high will they go?

All the way, Airborne.
All the way.

[Old Dog New Trick]

Yeah, I think people forget just how good we’ve had it lately.

Free money only lasts so long and then it costs real money, that apparently some college/university students will not understand until it’s too late. “What the fuck do you mean I have to pay taxes on a loan that was forgiven?”

Anyway, at least gas prices are consistent with demonrats in control! Jimmy Carter should be happy shit!

[Badger52]

Originally Posted by Old Dog New Trick

Free money only lasts so long and then it costs real money, that apparently some college/university students will not understand until it’s too late. “What the fuck do you mean I have to pay taxes on a loan that was forgiven?”

LOL.

[GratefulCitizen]

Get ready for “The Great Reset”.
Rising interest rates will ultimately result in people demanding socialism.

https://richardduncaneconomics.com/a...-of-creditism/

[Box]

Originally Posted by Old Dog New Trick

Free money only lasts so long and then it costs real money, that apparently some college/university students will not understand until it’s too late. “What the fuck do you mean I have to pay taxes on a loan that was forgiven?”

Almost as bad is the misunderstanding that your MA in human sexuality from San Fransisco State doesn't carry a six figure starting salary at a fortune 500 company that allows you to practice your "legalize drug" activism hobby.

Nobody told me that a Bachelors in Gender Studies was only good for a career teaching other morons about gender studies - and that I wont be making the same amount of money as Elon.

Wait, you mean my degree in feminist studies wont get me a starting job as a regional manager for General Motors?
...I should have studied Philosophy; that would have translated to a good job in the real world!

No wait - fuck that too - I don't want a career as a philosophy professor.

...and lets not forget about those loving parents that fill their kids empty skulls with false hope and pipe dreams of being a 'Doctor of Peace Studies' that will save the planet from Russian oligarchs and global warming.

Besides - when you have Nancy Pelosi and all of the other leftist activist politicians pushing for Cloward/Pivens' universal income scam - literally bribing an entire demographic for their public support (I say public support and not 'votes' because voting doesn't matter any more) - why would a brainwashed youthful ideologue give as much as a sideways glance to the concept of "paying what you owe" when the Pelsoischumersanders political machine has already promised you everything.



Rinse and repeat - welcome to the brave new world.

[JJ_BPK]

Originally Posted by GratefulCitizen

Get ready for “The Great Reset”.
Rising interest rates will ultimately result in people demanding socialism.

https://richardduncaneconomics.com/a...-of-creditism/

Thanks

[CSB]

It's been many years since I took Econ 101 in college, but I remember this:

There are three components of interest rates:

1 - Inflation. The interest rate must start at least at the same percentage as inflation,
or the lender is losing money, having loaned expensive dollars and
being repaid in cheap dollars.

By way of illustration, my mortgage of about $275,000 is financed at a 2.25% interest rate.
Of course I'm paying diligently, even overpaying to knock off principal early.
So while my loan is a "performing loan" on the books of the bank,
the bank is actually losing money every month.

Plus

2 - Return on Investment. This has been 2~3 % for decades.
That's a reasonable return. We financed WWII on 2.9% War Bonds.

Plus

3 - Risk of Default. This is a percent "add-on" to allow for the fact that not all loans will in fact be paid as contracted,
and so some of the performing loans must be "overcharged" to make up for the defaulting loans.

Depending on the risk (how good and how liquid is the collateral?) add another 2~3%.

So today, using the above numbers:
Inflation = 8%
Return on Investment = +3%
Risk Factor = +3%

We can reasonably expect 14% mortgage rates in 2023.

[Badger52]

Didn't know that thing about WWII bonds. Thanks!
Good post.

[GratefulCitizen]

Still waiting on news from the Fed on the rate hike.
It’s caused me minor some minor problems.

Been trying to buy a truck but the underwriter keeps jerking around my bank and finding excuses to delay.
Suspect it’s so they can see what the Fed does before they pin down my rate.

I got annoyed and just paid cash for the truck.
Simple enough to put a lien against it once the underwriter quits foot-dragging.

[JJ_BPK]

Originally Posted by GratefulCitizen

Still waiting on news from the Fed on the rate hike. (up 75 basis points )

It’s caused me minor some minor problems.

Been trying to buy a truck but the underwriter keeps jerking around my bank and finding excuses to delay.
Suspect it’s so they can see what the Fed does before they pin down my rate.

I got annoyed and just paid cash for the truck.
Simple enough to put a lien against it once the underwriter quits foot-dragging.

I would be leary,, 4 yrs ago, my credit was sitting at 825, with a home mortgage at 60% equity, a car loan at 45% equity, and one CC paid in total monthly. All my monthly bills are paid automatically by the bank.

I decided to pay off the car.
In less than a week my Credit Rating fell to 780.
After 4 yrs of ZERO change, it has wabbled back to 815 and hasn't moved in 6 months

The Credit industry does not like people that pay their bills and hates people that pay off debt.

I am sure there is a salivating bean counter sitting in his/she closet hyperventilating and waiting for the Fed to ok 15-17 % rates..

Caveat Emptor

[Paslode]

Originally Posted by JJ_BPK

I would be leary,, 4 yrs ago, my credit was sitting at 825, with a home mortgage at 60% equity, a car loan at 45% equity, and one CC paid in total monthly. All my monthly bills are paid automatically by the bank.

I decided to pay off the car.
In less than a week my Credit Rating fell to 780.
After 4 yrs of ZERO change, it has wabbled back to 815 and hasn't moved in 6 months

The Credit industry does not like people that pay their bills and hates people that pay off debt.

I am sure there is a salivating bean counter sitting in his/she closet hyperventilating and waiting for the Fed to ok 15-17 % rates..

Caveat Emptor

Nothing like getting penalized for paying off your debt. If you have a credit card with a $1500 and I use over 10% of the available credit your score gets dinged, but if you had a card with a higher limit it wouldn't budge. It's a bunch of jackassery.

I'd still rather live within my means, have little to no debt and take the lower credit score.

[GratefulCitizen]

Originally Posted by JJ_BPK

I would be leary,, 4 yrs ago, my credit was sitting at 825, with a home mortgage at 60% equity, a car loan at 45% equity, and one CC paid in total monthly. All my monthly bills are paid automatically by the bank.

I decided to pay off the car.
In less than a week my Credit Rating fell to 780.
After 4 yrs of ZERO change, it has wabbled back to 815 and hasn't moved in 6 months

The Credit industry does not like people that pay their bills and hates people that pay off debt.

I am sure there is a salivating bean counter sitting in his/she closet hyperventilating and waiting for the Fed to ok 15-17 % rates..

Caveat Emptor

I carried debt for years while in divorce temporary orders.

Once everything was paid down to low levels, my credit score was over 800.
Paid off everything and kept it there, suddenly a bunch of credit lines were cancelled and my credit score took a major hit.

Played this game before.
Still going getting a lien against the truck to keep my credit rating up (and put the cash to better use), just didn’t want to wait while the underwriter dicked around.

Two choices:

Wait for the underwriter, take a check from the loan down to the dealer, dealer gives the bank the title.
-or-
Write a check to the dealer from my account, take possession of the title, wait for the underwriter, put the money from the loan into my account, give the bank the title.

It’s stupid.

[cbtengr]

My credit rating is consistanly over 800 I have no debts and pay all my bills in full and on time. I am always being told that I could raise my score by carrying some debt. I guess if I was in need of borrowing money I might care. Am I a bad person for not carrying debt to raise my score?