What a Deal! Hampton Roads, VA

A 30 year fixed-rate mortgage hasn't always been the standard. As part of FDR's New Deal in 1934, the Federal Housing Administration was created to help Americans purchase homes with affordable terms.

Prior to then, many loans had an amount due at the end of the term called a balloon. Most mortgages had adjustable interest rates even though some might be fixed for a short time. While banks would loan money on a home, they retained the right to call the note due at any time which could exert considerable stress on borrowers.

FHA, during this time, introduced mortgages that offered a fixed rate of interest to the borrower for a 30 year term. This fully amortized loan provided borrowers a financial vehicle that would help them achieve the American Dream while minimizing the risk of having a loan called without the resources to pay it off. It brought long-term stability to the housing market and helped stimulate the economic recovery at a very difficult time in our nation's history.

Roughly, a third of the mortgages created in 2011 were less than 30 year terms. Many homeowners, similar to those after the Great Depression, would like to get their home paid for as soon as possible. Shorter term mortgages typically have a lower interest rate but higher payments due to fewer years to amortize the mortgage.

  • April 05 2013 - Virginia Beach
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    Answers (9)

    Profile picture for wetdawgs
    More cut and paste without attribution.  
    • April 05 2013
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    Nothing like drive by plagiarism to start the weekend. Well, that and a beer. 

    • April 05 2013
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    Profile picture for wetdawgs
    I'll take the beer, but could skip the plagiarism.
    • April 05 2013
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    Profile picture for 800lbs In The Room
    Just thought I would follow suit and paste something I know actually nothing about.....

    Astrophysics
    (Greek: Astro - meaning "star", and Greek: physis – φύσις - meaning "nature") is the branch of astronomy that deals with the physics of the universe, including the physical properties of celestial objects, as well as their interactions and behavior.[1] Among the objects studied are galaxies, stars, planets, exoplanets, the interstellar medium and the cosmic microwave background. Their emissions are examined across all parts of the electromagnetic spectrum, and the properties examined include luminosity, density, temperature, and chemical composition. Because astrophysics is a very broad subject, astrophysicists typically apply many disciplines of physics, including mechanics, electromagnetism, statistical mechanics, thermodynamics, quantum mechanics, relativity, nuclear and particle physics, and atomic and molecular physics. In practice, modern astronomical research involves a substantial amount of physics. The name of a university's department ("astrophysics" or "astronomy") often has to do more with the department's history than with the contents of the programs. Astrophysics can be studied at the bachelors, masters, and Ph.D. levels in aerospace engineering, physics, or astronomy departments at many universities.
    • April 05 2013
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    Profile picture for wetdawgs
    Dear Mr. Gorilla: 

    How about a beer instead?  

    What would your Mommy say?   "If Susie jumps off the cliff, are you going to do so also?"

    Respectfully,

    Woof Dawg
    • April 05 2013
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    Geez Debbie, don't you actually READ the comments being left on your postings? They're less than flattering to you. Perhaps you need to work a new angle.

    But of course you won't read this, so I'm wasting my time.
    • April 05 2013
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    Profile picture for wetdawgs
    Would you like a beer also Michael?   There's got to be a reason for stopping by!

    • April 05 2013
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    FHA, during this time, introduced mortgages that offered a fixed rate of interest to the borrower for a 30 year term.
    ==================================
    and remember, if your going to plagiarize, at least get the facts correct. 

    During "this time":

    1.  The maximum FHA loan was 20 years, not 30.
    2.  A 20% down payment was required.
    3. The maximum loan limit was $2,000.
    4. In total the maximum exposure FHA would cover was $1,000,000 (500 to 1000 loans?)
    5. MMI was capped at 1%, though in practice closer to 0.5%.
    6. The interest rate was "set" at 5% with an allowance for 6% in markets that would bear it.

    now to get my beer.
    • April 05 2013
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    Facts Schmacts  - bring on the buzz!
    • April 05 2013
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