Re:Rocket Mortgage to trim 8% of workforce as home-loan mark...
by oliwarner on Thursday April 28, 2022 @11:02AM
(#31193313)
> at the low rates they are
Low rates?! BOA is offering me 4.9% on 400k/800k, fixed for 30yr. But they still want 4% for a 5year ARM. Even after income tax deductions, how the hell do Americans afford houses with this sort of nonsense.
I guess that's what TFA is really driving at. It's getting hard to lend money on housing in the US.
https://bebusinessed.com/history/history-of-mortgages/
Fannie and Freddie basically agree to "back" those new mortgages (typically buying them from banks and selling them off later) as long as they conform to certain requirements - 15 or 30 year terms, 10-20% down payments, etc.
It's a massive subsidy for the housing market in the US, but also addresses the social goal of making housing accessible. You can get a mortgage and the monthly payment (interest + principle) never changes over the 30 year life of the loan.