Adjustable rate mortgages ARMs | Housing | Finance & Capital Markets

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Adjustable rate mortgages ARMs | Housing | Finance & Capital Markets | Khan Academy

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9 жыл бұрын

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Finance and capital markets on Khan Academy: Most people buying a home need a mortgage to do so. This tutorial explains what a mortgage is and then actually does some math to figure out what your payments are (the last video is quite mathy so consider it optional).
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Пікірлер: 32

@briannahoff8589 6 жыл бұрын

Thank you!! Why is this video so much better at explaining than the college I am paying thousands for?!?

@zoewimmers9330 3 жыл бұрын

I agree explained it well!

@alfanton07 8 жыл бұрын

This is great video!!! I am going through my Real Estate course and I love how you explain everything. I am so glad I found your videos. So helpful!

@zoewimmers9330 3 жыл бұрын

It was very helpful I agree

@rs72098 6 жыл бұрын

ARMs were a major factor in the 2008 market crash.

@Ighbat4u Жыл бұрын

Right! Let's learn from the past please!

@devchamlagai1974 2 жыл бұрын

Simply Amazing

@Ighbat4u Жыл бұрын

Great teaching!!

@MichaelMantion 4 жыл бұрын

I figured out around this time this video was uploaded that ARMS were actually a great deal, simply because rates have consistently gone down for the last 40 years.

@scottroark9722 Жыл бұрын

Except the last 6 months. Now you'd be screwed with an ARM!

@kakoi8017176414 3 жыл бұрын

Amazingly done. Thank you so very much

@anthonymetaxotos8446 2 жыл бұрын

If only he knew whats happening now.

@avinashsolanky 2 жыл бұрын

Lol

@journeyoffaith2117 2 жыл бұрын

Starts talking about ARM @ 2:40

@Ru4444 7 жыл бұрын

The FED control the market interest rate, who controls the ARMs interest rate? Thank you!

@JudeTubeHD97 7 жыл бұрын

The fed controls the money market funds ( short term rates on debt instruments) that includes adjustable mortgage rates.

@ragopatel7524 5 жыл бұрын

LIBOR and COFI controls ARMs rate

@ragopatel7524 5 жыл бұрын

MOST of the time

@MachoMelixD 6 жыл бұрын

I am going to be taking my NMLS test on the next few days and can’t seem to get my head around a few practice questions I have on ARM. Is there any way I can email you the questions and you can go over with me how to solve them? It would truly help me figure this out before I take this exam. This is my second time taking it and I intend to pass it this time and this topic always gets me nervous because I am not confident on it. Thank you for anything you can do.

@YeepLife 5 жыл бұрын

With a 5/1 ARM loan, can you refinance in a couple of months to a 30 yr conventional loan? Or, do i have to wait for 5 years? Do i have to earn a certain amount of equity before i can refinance to a lower rate conventional loan?

@toowhomitmayconcern2831 5 жыл бұрын

Yes you can refinance, just look for a prepayment penalty before you do.

@GiovanniMinto 6 жыл бұрын

doesn't inflation affect an adjustable rate mortgage as well?

@Jacob_Studer 4 жыл бұрын

Inflation will affect the index rates which affect your interest rate, so yes.

@RamjanAli-mv6un 3 жыл бұрын

Yes,of course

@fernandazotoduque3428 3 жыл бұрын

With fixed rate you pay allways the same percentage, the first month you owe 50 you pay 10 dis plus 2 dollars that represent the 4% of your principle, the next mont you owe 40 you pay 10 dls plus 1.6 dls witch represent the 4% of what you owe etc etc... it seams you are paying less interest but no it remains the same hour principle just diminishes

@fernandazotoduque3428 3 жыл бұрын

Adjustable rate it’s dependent in some index like 1 year treasuries if it increases so will the rate

@fischergrubb156 3 жыл бұрын

But many people hit the options reset, which allows them to pay half of the interest until the loan amount equals 110% of principal. Then they pay a significantly higher interest rate on 110% of the principal for the rest of the loan, which often raises the payments by double. This is why many people default. If you pay for the full interest and not half, it can get you a significantly lower rate than a fixed rate mortgage though

@matthewboddum7723 Жыл бұрын

This is not an accurate or complete analysis. The bank does not actually take on the risk in the fixed rate because they expect a bailout and have received a bailout from taxpayers in the past. Those bailouts encourage more risky lending. Borrowers can receive adjustable rate mortgages even if they know that, on their salary, they will not be able to make payments if the interest rates go up too much. This is a form of gambling. The risk to society is also ignored in this sociopathic analysis. If many people are on adjustable rate mortgages and there is a sudden interest rate hike (happening at the moment), many will not be able to pay and the house will go into foreclosure. This leads to family businesses closing, workers losing jobs, and a sudden loss of wealth for many people who had nothing to do with the private transaction. ARMs must be outlawed because they are economic time bombs.