Do you agree that if mortgage companies did not

Question

charge their customers pay three times over what the house costs then this foreclosure mess wouldn't get so bad, and more people would be doing well, and maybe even homelessness would decrease dramatically? Example :: 45,000 dollar financed for thirty years at 406.00 a month =146,160.00 I believe that it's insanity. Can anyone explain this for me? This is an actual figure from an FHA officer. I expressed interest in a home that was 45,000.00

Answer 1

I think if people realized that they had to pay three times over the cost of the home- they should be buying smaller more affordable homes.  The market is the way it is because moron bought homes they can't afford.  Banks have to make money too you know!

Answer 2

Do like the rest of us smart people do....take out a 15 year mortgage.  It will save you a ton of money and your mortgage payment will only be a couple of hundred dollars more a month.  Well worth it.

Answer 3

You are acting like you discovered something brand new that the rest of us didn't know.

It's not insanity...you have to predict that $45K out of your pocket today...that the BANK has to do without for the next 30 years, the staff to manage your loan, have a customer service center that you can call...that's alot.

Home loans have worked that way for 50 years or better.

If you think you are getting ripped off, then rent...and just keep flushing equity and tax savings down the toilet.

If you can't understand that, then you are not ready to buy.

Answer 4

Actually, I do mortgages at a bank.  I know the interest seems hard to understand, but nothing is free.  I appreciate the interest because it pays my salary.  If we were able to pay cash for a house, we would, but most can't.  That's the cost of borrowing money.  At least there are laws that make us disclose it in the beginning so you know what you are getting yourself into.  Good luck.

Answer 5

No I don't agree.  It is simple compound interest vs simple interest.