Strat is back!
Well, if I read this and the post about the "bundled up" loans... Youre right, I didnt understand it, and frankly, I dont very well even now. BUT... The fact is still that most wealth is held by the minority of people. They loan it out to the rest of us, on their terms. They have created a system that is very complicated, and yet you have to participate in it, if you want to buy a home, buy a new car... Most people have to, anyway. So, if we are talking about the blame - guess who I put it on.
Then there is the whole international thing. We (and Im talking about most of the "rest of the world" as you would put it) have certainly NOT created this crisis - this crisis came to us from the west. Now, because Americans and Western Europeans cannot afford to buy crap, we get less production, we get layoffs... We get as much shit as we can, before it starts to seriously affect you. The problem is that its the western companies that came here with work in the first place, created a dependency for it, and are now withdrawing it.
Now, I guess its down to moralising and "the flowery rights and wrongs" again... But I dont think there ever was a better time for it than now.
Yup. That was my "final" word on the subject... For now, anyway.
[Show/Hide Quoted Message] (Quoting Message by Deep Freeze from Tuesday, March 24, 2009 1:56:42 PM)| |  | Deep Freeze wrote: | | Good Day to you all!!! Very quiet here, I see. Hopefully, we are all studying about mortgages and interest!! HA!!!!!!! Where the hell is strat??? OK, my "final" words on this subject;
This is not a matter of "simple" interest. This is about amortized mortgage interest. An amortization table will show you how direct-reduction works. When you initially take a mortgage loan, your monthly payment is mostly interest and a little principal. In the first seven years or so, you pay only about 10% of the original balance. The rest is interest payment. It takes roughly 20 years to pay about HALF your balance! Of course, the amount of the principal paid does increase year after year and, in the last five years or so, you get a reversal and are paying mostly principal and little interest.
Keep in mind that, no matter how small the interest payment, you still are paying at the same interest rate. 6% is always 6% throughout the life of your loan. The interest you are paying is on the amount that is outstanding in any given year. The dollar amount of interest you pay goes down because the balance (principal) goes down. The interest rate is still constant.
There are ways to get around the dollar amount paid. It is known as acceleration. Most people do this by paying a half-payment every two weeks instead of once a month. (Bi Weekly) this reduces the dollar amount of interest you pay IF you have a loan that allows it. THERE is ANOTHER story!! Pre-payment penalties! Usually, you are not allowed to pay more than 20% of the outstanding balance in any given year because banks WANT that interest dollar!
There is more but I think I have made my point. I have done this for TWENTY freakin years. It is not a simple formula. MOST people do not understand it and they pay far more than they have to as a result. Class dismissed. |
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