Quote:
Originally Posted by Lotus99
Home mortgages though (unless specifically tied to prime) from what I know are tied to long term interest rates, not short term ones, b/c typically they're amortized over 25 years.
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Actually mortgage rates are tied to the yields of long-term bonds, and with the sub-prime / asset back commercial paper fiasco, there is now a disconnect (banks are more hesitant to lend money to other banks, let alone Joe Blow who wants a residential mortgage).
The 25 yr amortization period most of us once used for residential financing is quickly being replaced by 35 & 40 yr amortizations (especially popular with the younger crowd)