One big reason the U.S. housing market is broken: Owners don’t want to give up their cushy old loans.
  • the_q@lemmy.world
    19·
    1 year ago

    American mortgages are scams. $100k house at 3% interest over 30 years turns that $100k home into $189k giving the loan institution a free $89k all for commoditizing shelter.

    • Earthwormjim91@lemmy.world
      6·
      1 year ago

      Ah yes it’s so much worse than other countries where that interest is 3%, oh wait no now it’s 7%, oh never mind it’s 5% now, oh hold on now it’s 12%.

      A rate locked for the entire term of the mortgage is immensely better for the buyer than a rate that can change every 5 or so years.

    • joenforcer@midwest.social
      42·
      1 year ago

      $100k house

      Oh, you sweet summer child…

      Also, please come back when you understand opportunity cost. I will GLADLY pay anyone a 3% rate to front any amount of money I already have.

      • the_q@lemmy.world
        3·
        1 year ago

        I used that number for simplicity’s sake since so… so many of you have a hard time putting large numbers into understandable chunks.

        I do understand opportunity cost. My gripe is applying it to shelter to begin with. The whole notion of using shelter as a means for financial gain is absurd. That’s the reason 2008 happened and why housing is unobtainable now.

        I’m glad you have $100k on hand. Most don’t.

          • AlDente@sh.itjust.worksEnglish
            21·
            1 year ago

            Payment = rate*(loan amount)/(1-(1+rate)^(-number of payments))

            Rate =.03/12 = 0.0025

            Payment = 0.0025*100000/(1-1.0025^(-360)) Payment = $421.60

            Therefore, $151776 will be paid in total, or $51776 in interest.