The average person is a moron.

"A person is smart. People are stupid." - Men In Black

Some persons are smart. The average person is not.

I never quite understood why an average Joe would want an ARM. It makes sense in some unique situations, but they way they farm them out makes me think that a lot of people don't understand what they're getting themselves into.

That's an easy answer.

The average Joe can purchase a $500K house with a $75K income.

I know folks who have diligent brokers. They jump from teaser ARM to teaser ARM every 6-24 months. They build equity quickly by keeping 6-7% payments and the brokers rake in commissions. These are folks who could pay off their mortgages with the loose change in their ashtray so the risk is inconsequential.

I'm not big on regulation but something has to be done because I don't want to pay for the free ride of those who think they're on a free ride.

Sixto
93 300SD

ARM's can be good in a situation where rates are falling. However they seem to be getting used lately as a means to get the lowest monthly payment, and there for be able to afford more house than otherwise could be. This will lead people into trouble because interest rates are going up, and probably will for the next couple of years.

Interest only mortgage's are anothing poor idea, don't get me going.

All these different loan types do have there place, investors and people with higher financial intelligence can use them to there advantage. However for the average person looking to buy a house, a fixed rate IMHO is currantly the best way to go. Interest rates are still not bad.


What is currantly affecting a lot of people are those 80/20 loans. Try moving in 2 years if all of a sudden your house drops $50,000 in value. In some cases these people simply cannot move. Again though, if one is young and plans on staying in said house for quite a while, like 5-10 years, such a loan is not a bad idea.

__________________
2016 Corvette Stingray 2LT
1969 280SE
2023 Ram 1500
2007 Tiara 3200

And the average moron is a person.

BTW, I do agree about ARMs.

When the chickens finally come home to roost, there will be a lot of property out there available for next to nothing.

__________________
Current Benzes

1989 300TE "Alice"
1990 300CE "Sam Spade"
1991 300CE "Beowulf" RIP (06.1991 - 10.10.2007)
1998 E320 "Orson"
2002 C320 Wagon "Molly Fox"

Res non semper sunt quae esse videntur

My Gallery

Not in this weather!