Index is almost always the 1 Year LIBOR....and the margin is usually 2.25%. And the bank rately takes a loss on the loan because now they sell everything most loans to Fannie Mae, Freddie Mac or FHA.
God (real knowledge and wisdom/the everlasting Truth) has His advice for people around the world to stop your slavery to the system and international bankers/NWO (if you want your freedom and your true wealth, which they have stolen from you using their banking tricks and injustice laws, back). Unite and go to your local banks and demand all your savings back, they will collapse. Learn the truth about God at: thewayhomeorfacethefiredotnet
Watch Max Keizer Report to understand why we have bubble in housing market. Khan´s explanation only works in ideal situation where Bankers and Wall Street do not create greedy economy for bailout and gives themself hundred of million bonuses
@codredaniel Interest rates will vary throughout the 30 years, so if the bank is charging you the 5% fixed rate then they are taking a risk because the interest rate might raise, which means that they could have been making that much more. If the rate rose by 3% to 8% then the bank could have made an extra 3% if it was not fixed. This is also know as an opportunity cost.
In most states, a bank can not only take the house back on a foreclosure, but they have a 5 year window to get a deficiency judgement. Thus, if you have a 160,000 mortgage and the bank sells the home for 100,000, then you are on the hook for 60,000 -- with nothing to show for it.
The scary part is almost half of banks assets are backed by real estate. 22.5% of mortgage holders are underwater and the next 35% have less than 10% equity so with just another 10% drop in real estate prices, well over 50% of mortgage holders will be underwater which which is too much. Our rulers will do everything they can so real estate doesn't drop further which means they will continue to back ridiculous loans as well as continue to buy more and more bonds to keep rates super low.
Index is almost always the 1 Year LIBOR....and the margin is usually 2.25%. And the bank rately takes a loss on the loan because now they sell everything most loans to Fannie Mae, Freddie Mac or FHA.
AmStarMortgage 3 days ago
God (real knowledge and wisdom/the everlasting Truth) has His advice for people around the world to stop your slavery to the system and international bankers/NWO (if you want your freedom and your true wealth, which they have stolen from you using their banking tricks and injustice laws, back). Unite and go to your local banks and demand all your savings back, they will collapse. Learn the truth about God at: thewayhomeorfacethefiredotnet
asiantown2013 6 days ago
thank you
meme112233able 2 weeks ago
Call 1-877-375-3165 for your FREE Credit Analysis with Lexingtonlaw paralegals.
mostpopular2010 2 weeks ago
Check out the many videos I have posted answering common mortgage lender questions.
JCRealtyDenverLLC 1 month ago
interest mortgage video
buytoletlandlord 1 month ago
Don't buy a house until you can put at least 50% down.
FortNikitaBullion 3 months ago
Watch Max Keizer Report to understand why we have bubble in housing market. Khan´s explanation only works in ideal situation where Bankers and Wall Street do not create greedy economy for bailout and gives themself hundred of million bonuses
crumcon 6 months ago
@codredaniel Interest rates will vary throughout the 30 years, so if the bank is charging you the 5% fixed rate then they are taking a risk because the interest rate might raise, which means that they could have been making that much more. If the rate rose by 3% to 8% then the bank could have made an extra 3% if it was not fixed. This is also know as an opportunity cost.
ADRIANC92ER 6 months ago
If you had a 30 year fixed can you pay off the loan, before the 30 year period? Also could you pay off the 5/1 arm during the 5 year period?
Upthemeds 6 months ago
Thanks kahnacademy. May I recommend a follow up that explains refinancing.
SirHempsworth 6 months ago
Can someone give an example of how much money do you actually end up paying?
The way I see it from 30 year loan 5% return, if you always pay loan and return and the loan lineary decreases you pay 50% return?
NullTran 6 months ago
In most states, a bank can not only take the house back on a foreclosure, but they have a 5 year window to get a deficiency judgement. Thus, if you have a 160,000 mortgage and the bank sells the home for 100,000, then you are on the hook for 60,000 -- with nothing to show for it.
orlandofriend 6 months ago
Another wonderful video. Thanks khan academy! This video appeared when I needed it most.
hospee 6 months ago
The scary part is almost half of banks assets are backed by real estate. 22.5% of mortgage holders are underwater and the next 35% have less than 10% equity so with just another 10% drop in real estate prices, well over 50% of mortgage holders will be underwater which which is too much. Our rulers will do everything they can so real estate doesn't drop further which means they will continue to back ridiculous loans as well as continue to buy more and more bonds to keep rates super low.
FlipThatBond 6 months ago