Why are interest rates so low?

[ultrarunner]

I came to know the seller but she passed away last year.

I do remember the build as it is on the same street as my long term retired friend… even helped just by coincidence when about 20 guys where there setting the ridge beam back in 1994.

They had the home appraised and had Realtors for CMA value when I happened to say it looks like you are getting ready to sell.

I offered the appraised price as-is with 50% down and 90 days free after close of escrow which could be extended for covering PITI for 9 additional months…

I moved in after 4 months…

Change is constant and I’m already hearing remember when a mortgage could be had in the 2-3 range.

 

[jyoutz]

Pay less? Thats highly debatable.
Pension? UH HUH….

Yes I do qualify for a retirement pension when I retire. I have been contributing 10% of my paychecks for the past 30 years.

 

[Larry Caldwell]

Which is only fair. The whole point of mortgage interest deductions is to help people afford their 1st home. Most people who have 2nd mortgages are spending it on other stuff (or using the lower rates on mortgage loans to offset other spending).

You must have a huge mortgage or tremendously bad credit to have that deduction make that much difference. Must be nice to be a rich government employee.

The people who really got hurt were residents of the original 13 colonies, with their historic dependence on property taxes to fund the government. People got stuck paying tax on tax.

 

[jyoutz]

The people who really got hurt were residents of the original 13 colonies, with their historic dependence on property taxes to fund the government. People got stuck paying tax on tax.

Many of the “no income tax” states like Texas and Wyoming also heavily rely on property taxes to fund state and local governments.

 

[Larry Caldwell]

i refinanced my home last june at 2.25%. Today it's above 6%. The fed is raising hte rates, free money is ending. It will cause a housing crash in the next 2 years.

It's hard to tell what will happen with the housing market. They ran all the skilled workers out of construction in 2010, and contractors have been crying about not being able to find help ever since. The lack of labor has contributed to a housing construction slowdown and quality decline that has persisted for years.

If history is any indication, the next step is to sucker people into an ARM so they can qualify. I would like to believe bankers will be honest and tell people an ARM will only go up. I would also like to believe in Santa Claus. I expect the used house market to get tighter as people with a 3% fixed run the numbers and realize how much moving will cost them.

 

[Torvy]

The people who really got hurt were residents of the original 13 colonies, with their historic dependence on property taxes to fund the government. People got stuck paying tax on tax.

Property taxes were no or more less deductible than any other state tax. The people who had to pay more were from those states who had been squeezing more taxes from the rest of us to pay for their waste.

 

[Snobdds]

Many of the “no income tax” states like Texas and Wyoming also heavily rely on property taxes to fund state and local governments.

Yes and no. We have an abundance of mineral wealth. The royalties pay for a lot of the state budget. We also had a smart legislative branch that set up a permanent mineral trust fund that has grown to hundred of billions of dollars that is designed to make up the difference when commodity prices fall. It keeps the dependence on property taxes low.

Property taxes are what they are. I pay an ungodly amount each year. I figured it out one day, mine comes out to about $2/acre/year just on the land. The "improvements" are always extra.

 

[jyoutz]

Yes and no. We have an abundance of mineral wealth. The royalties pay for a lot of the state budget. We also had a smart legislative branch that set up a permanent mineral trust fund that has grown to hundred of billions of dollars that is designed to make up the difference when commodity prices fall. It keeps the dependence on property taxes low.

Property taxes are what they are. I pay an ungodly amount each year. I figured it out one day, mine comes out to about $2/acre/year just on the land. The "improvements" are always extra.

My state has a huge land grant permanent fund as well. The state legislature is only allowed by the state constitution to spend 5% of the fund annually for schools and hospitals. This year that spent amount was $1.3 billion. But still we have personal income tax (at low rates), and property taxes are also pretty reasonable.

 

[ultrarunner]

Yikes. You have to be able to just make a business decision and do what's best for you. Unless it's a personal friend that you would like to do a $9K favor for, I'd say no.

There was a time when I wanted to run a gas line down the road to our remote property in preparations to build a house. It would have been $8K. The gas company said to ask the neighbors across the street if they wanted to pitch in to split it 4 ways. If they didn't, they could tap into it after 3 years without paying any of the $8K run fees. So I asked them. They all said no. Things changed, we had kids, we decided not to build, so we didn't run the gas line.

Many years later, all 3 of them asked me to pitch in to have a gas line run. It was now considerably more than the $8k. I had no reason to need gas, so I declined, knowing that if we ever built in the future, we'd just have to pay the tap-in fee. One of them got quite upset at us. I reminded them that I offered them the same opportunity years earlier and they declined, and that it was bad business for them back then and it's bad business for us today. They got over it.

Well looks like nothing happening…

The executor called saying meeting with a lawyer to get the mortgage paid and I would be hearing back… several weeks and nothing

My payment always early and 4 years left…

Of course I would refi if the estate would participate in the cost of the refi as rates are higher now…

Evidently it did not go over well… and lawyer probably confirmed as long as payments current it is what it is.

 

[2manyrocks]

The flip side is the executor could sell the note to a third party purchaser for cash, but the cash equivalent would be discounted to reflect the uncertainty of future interest rates and any risk inherent to the note. The estate beneficiaries would then take the interest rate hit in the form of a discount instead of you taking the hit in the form of an increased interest rate and refi costs.

To avoid this discount cost to them, they may use some sort of agency arrangement to collect your payment and then disburse it to the heirs in the correct proportions for the remaining term of the note.