Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: TimbaBear who wrote (36018)	7/14/2005 2:52:39 PM
From: ild	Read Replies (1) \| Respond to of 110194

Yes, it's NegAm loan. This year Option ARM loan is the most popular in CA. Message 21487919

To: TimbaBear who wrote (36018)	7/14/2005 2:58:51 PM
From: Wyätt Gwyön	Read Replies (1) \| Respond to of 110194

Timba, either the 1.25% mentioned by the article is incorrect, or it is negam. later in the article, it gives this example of an option ARM: On a $400,000 loan, for example, a buyer who made only minimum payments over the first five years would add more than $27,000 to the end of the loan, assuming short-term rates increase by one percentage point over the course of the loan, said Robert Binette, a mortgage broker with Hamilton Mortgage in Ridgefield, Conn. The monthly payment would jump from $1,718 in the final month of the fifth year to $2,580 after the loan was reset, a difference of more than 50 percent. in this case, the excess interest not paid is only $5400 per year, or 1.35% of the original 400K on average per year, so the minimum payment option must be quite a bit higher than 1.25%.