Housing Doom Housing Bubble Blog

I thought we could best celebrate American Independence Day with this quote from Thomas Jefferson:

All tyranny needs to gain a foothold is for people of good conscience to remain silent.

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I’m heading back from Southern California today, where I’ve spent the past few days.  I should be home in time to take the kids to see the fireworks, if the tires don’t melt off the car somewhere between Blythe and Quartzsite.  I’m getting packed and ready to go- but I couldn’t resist a post on this one.

While driving around LA yesterday, I heard an ad on the radio for a mortgage, and went to the website they mentioned.  Here’s their current advertised special:

This by far is the most exciting new loan program we’ve rolled out in years!  Our new Flex Loan Program gives you the security of a low 5 year fixed rate (starting as low as 5.875%).  You can make fully amortized payments or interest only payments (there’s no deferred interest with these two options).  In addition during the first 5 years you can make half a payment!  What sets this option apart from older "pay option" loans is if you choose to make half the payment the amount deferred is much less because of the low fixed interest rate.  After 5 years the loan becomes an assumable adjustable rate mortgage that allows you to continue the option of making interest only payments for an additional 5 years.  This is a loan with no surprises and is perfect for those that want the security of a low fixed rate with payment options that make sense.

I read the ad and immediately thought of two surprises you could have five or ten years from now- how much money you still owe on your property and how much it’s worth. 

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