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Interest rates going up.

So the geniuses that are running things right now are raising rates for home loans and other loans right now. Seems if they wanted to fix the economy they would keep them low. We are locked into our rate but I know many who are getting ducks in a row so they can buy and now are in a scramble since the rates are up nearly a 1 percent in our area overnight. What are your thoughts on this? Do you think it is wise to raise rates when so many homes are in forclosure? Applications for new mortgages are down since the rates started sneaking up. Why would our current leaders in charge do this? Seems it will only hurt things not make them better.

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Anonymous

Asked by Anonymous at 11:22 AM on Jun. 10, 2009 in Politics & Current Events

Answers (8)
  • No, it's not wise to raise the rates right now. Everything is pointing to things continuing to decline at least through the end of this year. But then again, we have some dim bulbs in decision making positions.
    Anonymous

    Answer by Anonymous at 11:25 AM on Jun. 10, 2009

  • It's mainly out of their control. The markets are causing the interest rates to raise since our treasuries aren't selling as well. Our treasuries not selling can be taken as a good sign that people are wanting to invest in riskier things such as the stock market, commodities and or corporate bonds or it can be taken as a bad sign that people are loosing faith in the US dollar. Fed rates are still at 0% and there is only so much they can do. They might try and buy some treasuries to try and keep the rates low but if the market is pushing them up, then they can only do so much.
    smalltowngal

    Answer by smalltowngal at 11:27 AM on Jun. 10, 2009

  • We are experiencing this right now. We have been looking for a home for about a year now and they were 4.75 when we started looking. We made an offer on a house that was in the process of foreclosure and the bank decided they would rather hold it and not except it at a loss so we lost it. Now the rates are 5.75 with a rumor they are going up more.

    This will adjust how much we thought we could afford. It will probably delay us purchasing a home so we can save some more money.

    I'm really baffled at what gov't is doing. I have yet to see any "help" from Obama! They could give me a bailout, I promise I won't go bankrupt like GM did.

    Oh, did I mention my husband got laid off and we had to sell our house at a loss so we could move to another state for his new job. WTH is Obama doing over there??
    lil_angel00

    Answer by lil_angel00 at 11:27 AM on Jun. 10, 2009

  • Typically interest rates go up to keep inflation in check. The spending spree and the glut of deficient spending threaten to drive up inflation.

    It's a catch-22 here. Yes, if you want people to buy big they will need loans. Loans that won't be taken if interest rates are too high or loans that are taken but cost more. Higher rates are therefore bad.

    On the other hand, inflation is bad for the economy too and an attempt should be made to keep it in check. Therefore interest rates go up.

    The best case scenario would have been for Congress to actually take the time to read and understand the volumes of pages in the Stimulus bill earlier this spring. It would have behooved them to limit spending on programs that were not 'mission critical' which would have limited the impact to the deficit. When they gorged themselves on spending programs and started buying up auto-companies, etc they laid ground work for higher rates
    ldmrmom

    Answer by ldmrmom at 11:29 AM on Jun. 10, 2009

  • It's called inflation. Just be glad you are buying now and not a year from now when it's 12% and up. It's just a fact of the government printing and spending like crazy.
    We just got in on the 4.75 and thank goodness we are locked in. We have had so much trouble and it has been a nightmare. I noticed the same company is advertising 5.3 % instead of 4.75% this week.
    itsmesteph11

    Answer by itsmesteph11 at 11:32 AM on Jun. 10, 2009

  • They could give me a bailout, I promise I won't go bankrupt like GM did.

    Ain't this the truth!

    Anonymous

    Answer by Anonymous at 11:42 AM on Jun. 10, 2009

  • So glad we're done with mortgages!
    Ladybugkisses76

    Answer by Ladybugkisses76 at 12:00 PM on Jun. 10, 2009

  • hmmm we just got a pre-approval last night for a home loan locked in at 4.5%. We are not going with a flexible loan rate, to do so so would be stupid. Now we just have to find our dream home.
    lady-J-Rock

    Answer by lady-J-Rock at 12:12 PM on Jun. 10, 2009

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