[capeman]

But since the Fed is currently the sole provider of credit to the banking system via US Treasuries, if the cost of Gov’t debt goes up drastically the FFR is powerless and it’s illusion of value will be gone. The long end of the bond curve is what to keep an eye on as it drives the validity of the FFR value.

[capeman]

But since the Fed is currently the sole provider of credit to the banking system via US Treasuries, if the cost of Gov’t debt goes up drastically the FFR is powerless and it’s illusion of value will be gone. The long end of the bond curve is what to keep an eye on as it drives the validity of the FFR value.

[capeman]

But since the Fed is currently the sole provider of credit to the banking system via US Treasuries, if the cost of Gov’t debt goes up drastically the FFR is powerless and it’s illusion of value will be gone. The long end of the bond curve is what to keep an eye on as it drives the validity of the FFR value.

[capeman]

But since the Fed is currently the sole provider of credit to the banking system via US Treasuries, if the cost of Gov’t debt goes up drastically the FFR is powerless and it’s illusion of value will be gone. The long end of the bond curve is what to keep an eye on as it drives the validity of the FFR value.

[capeman]

But since the Fed is currently the sole provider of credit to the banking system via US Treasuries, if the cost of Gov’t debt goes up drastically the FFR is powerless and it’s illusion of value will be gone. The long end of the bond curve is what to keep an eye on as it drives the validity of the FFR value.

[capeman]

Marion, home prices are based on affordability and most of the time (other than the last 6-8 years) closely tied to fundamentals. In the last 6-8 years prices have been driven to the point of exhausting affordability even with tinkered and highly levered loan products. To make it simpler to see take the home you want to buy plug the loan amount into the amort calculator at the current interest rate and 20% down and try adding 4-5% to that. Adjust the loan amount so that you have a the same payment at the higher rate and the difference is a good idea of the hit your home value would take if rates increased.

Given the fact that the credit markets are getting so bad that banks don’t trust each other and the Gov’t is stepping in and taking on losses to help these banks (i.e. Bear Stearns) we should expect to see Treasury rates rise drastically in lack of trust. That will bring about increased mortgage rates in a bad way.

[capeman]

Marion, home prices are based on affordability and most of the time (other than the last 6-8 years) closely tied to fundamentals. In the last 6-8 years prices have been driven to the point of exhausting affordability even with tinkered and highly levered loan products. To make it simpler to see take the home you want to buy plug the loan amount into the amort calculator at the current interest rate and 20% down and try adding 4-5% to that. Adjust the loan amount so that you have a the same payment at the higher rate and the difference is a good idea of the hit your home value would take if rates increased.

Given the fact that the credit markets are getting so bad that banks don’t trust each other and the Gov’t is stepping in and taking on losses to help these banks (i.e. Bear Stearns) we should expect to see Treasury rates rise drastically in lack of trust. That will bring about increased mortgage rates in a bad way.

[capeman]

Marion, home prices are based on affordability and most of the time (other than the last 6-8 years) closely tied to fundamentals. In the last 6-8 years prices have been driven to the point of exhausting affordability even with tinkered and highly levered loan products. To make it simpler to see take the home you want to buy plug the loan amount into the amort calculator at the current interest rate and 20% down and try adding 4-5% to that. Adjust the loan amount so that you have a the same payment at the higher rate and the difference is a good idea of the hit your home value would take if rates increased.

Given the fact that the credit markets are getting so bad that banks don’t trust each other and the Gov’t is stepping in and taking on losses to help these banks (i.e. Bear Stearns) we should expect to see Treasury rates rise drastically in lack of trust. That will bring about increased mortgage rates in a bad way.

[capeman]

Marion, home prices are based on affordability and most of the time (other than the last 6-8 years) closely tied to fundamentals. In the last 6-8 years prices have been driven to the point of exhausting affordability even with tinkered and highly levered loan products. To make it simpler to see take the home you want to buy plug the loan amount into the amort calculator at the current interest rate and 20% down and try adding 4-5% to that. Adjust the loan amount so that you have a the same payment at the higher rate and the difference is a good idea of the hit your home value would take if rates increased.

Given the fact that the credit markets are getting so bad that banks don’t trust each other and the Gov’t is stepping in and taking on losses to help these banks (i.e. Bear Stearns) we should expect to see Treasury rates rise drastically in lack of trust. That will bring about increased mortgage rates in a bad way.

[capeman]

Marion, home prices are based on affordability and most of the time (other than the last 6-8 years) closely tied to fundamentals. In the last 6-8 years prices have been driven to the point of exhausting affordability even with tinkered and highly levered loan products. To make it simpler to see take the home you want to buy plug the loan amount into the amort calculator at the current interest rate and 20% down and try adding 4-5% to that. Adjust the loan amount so that you have a the same payment at the higher rate and the difference is a good idea of the hit your home value would take if rates increased.

Given the fact that the credit markets are getting so bad that banks don’t trust each other and the Gov’t is stepping in and taking on losses to help these banks (i.e. Bear Stearns) we should expect to see Treasury rates rise drastically in lack of trust. That will bring about increased mortgage rates in a bad way.

[capeman]

Careful Marion, interest rate rises are home value killers. That’s likely to be the final stake in the heart of the housing market causing values to crash precipitously. I plan on buying my first home too but plan on waiting until the Treasury market takes a dive and housing has reacted. I’ll be paying massive interest but not worrying as much about soon losing the down payment equity.

Also remember that FFR does not dictate mortgage rates. The 10 year U.S. Treasury rate is most closely tied to mortgage rates.

[capeman]

Careful Marion, interest rate rises are home value killers. That’s likely to be the final stake in the heart of the housing market causing values to crash precipitously. I plan on buying my first home too but plan on waiting until the Treasury market takes a dive and housing has reacted. I’ll be paying massive interest but not worrying as much about soon losing the down payment equity.

Also remember that FFR does not dictate mortgage rates. The 10 year U.S. Treasury rate is most closely tied to mortgage rates.

[capeman]

Careful Marion, interest rate rises are home value killers. That’s likely to be the final stake in the heart of the housing market causing values to crash precipitously. I plan on buying my first home too but plan on waiting until the Treasury market takes a dive and housing has reacted. I’ll be paying massive interest but not worrying as much about soon losing the down payment equity.

Also remember that FFR does not dictate mortgage rates. The 10 year U.S. Treasury rate is most closely tied to mortgage rates.

[capeman]

Careful Marion, interest rate rises are home value killers. That’s likely to be the final stake in the heart of the housing market causing values to crash precipitously. I plan on buying my first home too but plan on waiting until the Treasury market takes a dive and housing has reacted. I’ll be paying massive interest but not worrying as much about soon losing the down payment equity.

Also remember that FFR does not dictate mortgage rates. The 10 year U.S. Treasury rate is most closely tied to mortgage rates.

[capeman]

Careful Marion, interest rate rises are home value killers. That’s likely to be the final stake in the heart of the housing market causing values to crash precipitously. I plan on buying my first home too but plan on waiting until the Treasury market takes a dive and housing has reacted. I’ll be paying massive interest but not worrying as much about soon losing the down payment equity.

Also remember that FFR does not dictate mortgage rates. The 10 year U.S. Treasury rate is most closely tied to mortgage rates.

[Author]

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