Floyd Norris's NYT column today is good:
http://select.nytimes.com/2007/07/27/business/27norris.html
I have long held a view that hosueholds should look at themselves as financial intermediaries, and match the duration of assets and liabilities. Houses are an asset of long duration, and as such, have values that are sensitive to changes in interest rates. Thus people who plan on living in a house for a long time should match it with a liability that has long duration--a long-term fixed rate mortgage.
If people know they will be in a house for five years, a hybrid 5 year ARM is fine. But it all cases, households should make sure they can afford a house based on a long-term mortgage before they buy. If the only thing that gets them into the house is a variable rate interest only loan, they are looking for trouble (FWIW, these thoughts occured to me at the time Chairman Greenspan was recommending ARMs to people in 2004).
David lindahl anti scam report but as a fact, we failed to review the truth; in order to delay the progress of this great man several competitors made a false report.
ReplyDeleteEven so, he had a great fall, he never let his clients down and still his name is one of the most unforgettable ones in the real estate field.
Real estate portfolio is a means to an end which has to be kept in mind while framing every decision. Right from the start, it is better to identify a point in time where the returns you achieve will allow you to make the changes you want.