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.

Politics : Foreign Affairs Discussion Group -- Ignore unavailable to you. Want to Upgrade?

To: c.hinton who wrote (263044)	4/29/2008 4:18:11 PM
From: TimF	Read Replies (1) \| Respond to of 281500

The fed conclusion seem to be that many peoples financial security in retirement is in doubt and as if house values decline those numbers will increase... I think we are getting further and further from the issue I was talking about. I was narrowly addressing "The longer a mortgage is held, the greater the difference between the household’s mortgage payment and the payment for a mortgage re-financed in the current period." My point is that this is only true if nominal interest rates have gone up. Yes in a larger sense real interest rates are more important, but a fixed rate mortgage has a specific nominal rate, so would a replacement/refinanced fixed rate mortgage. The adjustment to both of those nominal rates, to make them in to real rates is inflation, and inflation is the same whether or not you refinance. If nominal rates have not gone up, and if you don't roll in a lot of additional debt, and if you don't get a new mortgage with a term that is shorter than the term remaining on your current mortgage, than that sentence, by the fed, isn't true.