total horseshit
archives
Monday, June 13, 2005
Is this the building tectonic pressure that's going to release the tidal wave? See recent CNN-online article.
Points of interest:
- 42% of people are buying houses with nothing down
- Only 10% of people are buying houses with the traditional 20% down -- most are using piggy-back loans to get to the 20% down payment. Problem? The rate on the piggy-back loan is variable (meaning they're fucked once rates start to rise if they can't sell their house, two factors which would seem to covary strongly in a market collapse). I wonder if they limit paying off the loan all at once.
- You can now get a loan where the monthly payment is less than the interest on the loan (the less-than-interest loan)!
Note to self: short lendingtree.com, invest in the foreclosure/collections/repossession sector
Points of interest:
- 42% of people are buying houses with nothing down
- Only 10% of people are buying houses with the traditional 20% down -- most are using piggy-back loans to get to the 20% down payment. Problem? The rate on the piggy-back loan is variable (meaning they're fucked once rates start to rise if they can't sell their house, two factors which would seem to covary strongly in a market collapse). I wonder if they limit paying off the loan all at once.
- You can now get a loan where the monthly payment is less than the interest on the loan (the less-than-interest loan)!
Note to self: short lendingtree.com, invest in the foreclosure/collections/repossession sector
Tomohiro Idokoro comments:Question: what are the terms on all those variable-rate piggy-back loans? Can they be paid off early?
What are the terms on interest-only loans? Does the monthly payment rise at the end of the interest-only payment period? Does the rate get readjusted?
What are the terms on interest-only loans? Does the monthly payment rise at the end of the interest-only payment period? Does the rate get readjusted?
