Unless the govt. bails them out like United Airlines.
Jon Stewart said it best: “Why give United 1.8 Billion when there are other airlines like American, Delta, Southwest, Continental, and Jet Blue”???
Its amazing how much pull some of these companies have now days!! I just know that the rich traders and other investors have been “shorting” the stock for awhile now. They are making out like bandits, while the govt. just seems to give them money!
Disney, has even been investigating their book keeping! Lucky for them they will have more money than they thought. lol Maybe they can loan some to Worldcom!!
I find it hilarious that the interest in ARMS is surging as well. There’s a lot more room for rates to go up, rather than down, from here. The time to sign up for the ARM was about 2 years ago, when everyone was wondering if the 10 year bull market was coming to a close. The folks signing up for short-term ARMS today are likely to be in for a rude surprise.
I thought I was the only one when I saw folks still using ARMS. I kept trying to picture in my head who would get a benefit from an ARM. 2 to 3 years ago it was right to get people into an ARM as the risk was good to the benefit of the ARM. The chance was good that a refi could happen with the first few years to go fixed. Well, rates are lower now and people have refi’d into fixed; so who needs an ARM now-a-days? The 90’s are over.
Yes, those people looking to get into a more expensive house today can qualify for more house with an ARM, but is it wise to go that direction when the rates are this low? Is the risk of rising rates in the next few years really worth it? I don’t know if rates will go up by much in the next 2 years, but I have to wonder if the Dot Bombs, Enron, WorldCom, Xerox, Boeing Layoffs, etc… will cause a blip in the economy such that an increase would be coming. BTW, did anyone catch WorldCom dropping from 83 cents in the morning to a final close at the end of day of 6 cents?
For any of you mortgage reps who might be visiting here, can you tell me who can benefit from an ARM when rates are @ 6.5% fixed? Is it really just for those folks looking to get more house for their buck right now and the risk of rates increasing worth it?
It has been a couple of years since I had recommended a client to use an ARM, as it is a mortgage reps job to help find the right financing, but at the time my rep was telling me it was a good idea to go that route.
With initial ARM rates two points lower than the fixed rate, owner occupants who only intend to keep their house less than seven years usually come out ahead over the fixed rate purchaser.
Personnally, I have three long term rental properties with ARM financing and have had this financing in place a little over four years now. A recent rate adjustment put my periodic rate at 5.703% on two of the loans and at 5.473% on the third.
I suppose the super-savvy could take advantage of the ARM, as others have indicated here, and then hedge against index increases using exchange traded futures…