Someone please explain mortgage interest rates on adjustable rate mortgages

[Tony D'Amato]

Im trying to help someone, but I dont understand. The interest rate theyre paying is 9%, but the actual mortgage interest rate appears to be lower than that.

Biden vtout to lose so bad over shyt like this. Trump was bullyin them to not go crazy on those rates.

 

[Remote]

Im trying to help someone, but I dont understand. The interest rate theyre paying is 9%, but the actual mortgage interest rate appears to be lower than that.

Biden vtout to lose so bad over shyt like this. Trump was bullyin them to not go crazy on those rates.

Let's be clear about what's happening here.

You don't understand how adjustable interest rates for mortgages work.

And you're certain the President controls this somehow.

 

[Mook]

Let's be clear about what's happening here.

You don't understand how adjustable interest rates for mortgages work.

And you're certain the President controls this somehow.

Lmao. Story of America.

 

[Tony D'Amato]

Let's be clear about what's happening here.

You don't understand how adjustable interest rates for mortgages work.

And you're certain the President controls this somehow.

N2gga, Trump told dat bish to leave the interest rates low, and they was low.

I remember that.

But how do they work? Im curious

 

[Secure Da Bag]

Let's be clear about what's happening here.

You don't understand how adjustable interest rates for mortgages work.

And you're certain the President controls this somehow.

You've just described how the majority of America chooses who and how to vote.

 

[The Realist Perspective]

Im trying to help someone, but I dont understand. The interest rate theyre paying is 9%, but the actual mortgage interest rate appears to be lower than that.

Biden vtout to lose so bad over shyt like this. Trump was bullyin them to not go crazy on those rates.

An adjustable rate mortgage starts with a low interest rate for the first few years. After that initial period, the rate can change every year, going up or down like a rollercoaster. The changes depend on two things: the market rate and a little extra amount the bank adds. There are also limits, called caps, to make sure the rate doesn’t go too high or too low.

For example, if your rate starts at 4% for the first five years, it’s nice and steady. After those five years, the rate can change every year. If the market rate is 3% and the bank adds an extra 2%, your new rate would be 5%. If your current rate is 9%, it means the market rate plus the bank’s extra amount added up to that. So, ARMs start with a low rate and can change over time.

 

[Koapa]

What in the living shyt are you talking about?

If you don't know what you're doing stop assisting them.

Biden nor Trump has anything to do with a person getting a damn adjustable rate mortgage.

 

[Tony D'Amato]

An adjustable rate mortgage starts with a low interest rate for the first few years. After that initial period, the rate can change every year, going up or down like a rollercoaster. The changes depend on two things: the market rate and a little extra amount the bank adds. There are also limits, called caps, to make sure the rate doesn’t go too high or too low.

For example, if your rate starts at 4% for the first five years, it’s nice and steady. After those five years, the rate can change every year. If the market rate is 3% and the bank adds an extra 2%, your new rate would be 5%. If your current rate is 9%, it means the market rate plus the bank’s extra amount added up to that. So, ARMs start with a low rate and can change over time.

Why is the bank allowed to add tho. Especially when your original agreement was probably with a different institution?

 

[Tony D'Amato]

What in the living shyt are you talking about?

If you don't know what you're doing stop assisting them.

Biden nor Trump has anything to do with a person getting a damn adjustable rate mortgage.

The fed doesn't control this?

 

[Mandarin Duck]

Sounds like you....the person you're helping had an initial mortage rate lower than 9%. It's now increased.

There's a limit on how much an adjustable rate mortgage can increase so find out how much your rate can increase over the life of the loan by contraction the loaning institution you got your house from.

 

[The Realist Perspective]

Why is the bank allowed to add tho. Especially when your original agreement was probably with a different institution?

The bank adds a little extra to cover their costs and make a profit. This extra amount, called the margin, is agreed upon when you first get the mortgage. Even if your mortgage gets sold to another bank, the terms of your original agreement, including the margin, stay the same. This is why the new bank can still add the margin to the market rate to calculate your interest rate. The margin helps banks manage their risks and ensure they can continue lending money to others. Cold game.

 

[Orange cream shake]

Im trying to help someone, but I dont understand. The interest rate theyre paying is 9%, but the actual mortgage interest rate appears to be lower than that.

Biden vtout to lose so bad over shyt like this. Trump was bullyin them to not go crazy on those rates.

You wanna help, tell them to call their
mortgage company who has access to their note and let them explain it. unless Something happens that disrupts the economy , trump wont have a major impact either. All of this started or was a result of what happened during trumps presidency.

 

[kj614]

Fixed rates are permanent.. adjustable rates, that have always been available, offer a lower up front rate that raises later. You should only take adjustable if you can pay off the loan before the adjustment.

 

[Tony D'Amato]

The bank adds a little extra to cover their costs and make a profit. This extra amount, called the margin, is agreed upon when you first get the mortgage. Even if your mortgage gets sold to another bank, the terms of your original agreement, including the margin, stay the same. This is why the new bank can still add the margin to the market rate to calculate your interest rate. The margin helps banks manage their risks and ensure they can continue lending money to others. Cold game.

So if the rate is 7, the bank can just add 2%, thats fukked up.

Be honest, can Trump fix this?

 

[Bubba T]

Why is the bank allowed to add tho. Especially when your original agreement was probably with a different institution?

The margin rate he is referring to is written in the contract you sign when you take out the mortgage. Banks charge a margin rate because that is the profit to be paid for them in loaning you the money for the mortgage.

You see something similar with credit cards and the variable APR. What that APR consists of is the cost of borrowing (these days it’s the SOFR) plus a margin the bank charges. These are part of the reasons why people should pay attention to what the Federal Reserve does.