Maybe Americans aren't dumb enough to keep buying houses?

Re:Maybe Americans aren't dumb enough to keep buying houses? by pstack on Saturday May 14, 2011 @07:46PM (#2548876)

In the US, you have fixed-rate mortgages and adjustable-rate (ARMs). Fixed rates are usually 15 and 30 years. The longer the term, the lower your monthly commitment, of course. I believe a 30yr fixed rate is probably the most common type of mortgage. I don't know the details of the ARMs, but a lot of people were suckered into those which is why a lot of people are having huge problems, these last few years. If you get as much or more house than you can afford so that you're just getting by every month and a few years down the road, your rates jump, you're screwed.

My fixed mortgage is fixed for the life of the loan (until 2040), so over time, the percentage of my income dedicated to paying my mortgage will continue dropping.

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Re:Maybe Americans aren't dumb enough to keep buying houses? by petercooper on Sunday May 15, 2011 @06:52AM (#2549738)

As a European I'd give up a non-essential body part for a mortgage like that. Even 10 year fixes are rare in the UK and we're coming off of a 2 year fix later this year. While we have plenty of leeway with our budget, it's pretty annoying not knowing the exact amount I'll be paying until the very end of the mortgage. I wonder why this concept doesn't exist here.

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Re:Maybe Americans aren't dumb enough to keep buying houses? by arethuza on Sunday May 15, 2011 @10:01AM (#2549950)

There appears to be a lot of government involvement in the US mortgage market (e.g. providing guarantees for mortgage backed securities). We don't have anything like that in the UK.

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