Cash The Checks

The real estate market boom that we’ve been experiencing up until about a year ago was due in part to ARM loans. ARM laons are Adjustable-Rate-Mortgage loans. This means that your introductory interest rate starts off very low, and then in 3 or 5 years, it will adjust to a much higher rate. Sounds dangerous doesn’t it? It can either adjust down or up, but most likely it will go up and your payments might double. So you’ll be forced to sell your house, if you can’t sell it or afford another house, you’re screwed, time for a foreclosure!

So who is to blame for people entering into these silly loans? The lenders or the home owners? The answer is a little of both, but mostly the home owners. Credit card companies also offer introductory APR’s of 0% that go up to 20% later, but that’s not their fault, if you’re dumb enough to fall for it, knowing what the terms are, then it’s your fault and nobody should help you.

I heard on the news today that some politicians may entertain the idea of raising taxes to bail out these people who find themselves in these tough predicaments. It sounds completely unfair that if you work hard, do everything right, save your money for a down payment & get a fixed rate loan, that you have to pay for the mistakes of others. I don’t like this “we’re all in this together” attitude. If that’s the case, there’s little motivation to succeed, because you’re always going to have the government helping you out regardless of what mistakes you make.