http://www.wakeupfromyourslumber.com/node/956
If you're an aspiring 'home owner', what you're about to read will really tick you off.
If you rent, you'll discover that for most Americans, the dream of 'home ownership' is nothing but a cruel, unmitigated hoax.
Take, for example, this report on mortgages from last September:
Roughly half of all African-Americans and Hispanics who bought homes last year are paying above-average mortgage rates, a significant increase over 2004, the Federal Reserve says in a new report.
Overall, one in four home buyers took out a high-priced mortgage last year, double the rate in 2004. The sharp increase was attributed to the rising number of buyers with shaky credit who could afford only small down payments, as well as to changes in interest rates.
* * *
These high-priced, or subprime, loans carry rates at least 3 points above the benchmark rate for prime loans. At today's rates, a subprime buyer of a median-priced home of $230,000 would pay at least $1,547 a month, while a prime borrower would pay $1,163, assuming the buyers could afford a 20% down payment.
"When you see that in 2005 half of African-Americans are paying higher-priced credit, it does suggest there is a drain on the wealth effect of homeownership," says Allen Fishbein, director of housing and credit policy for the Consumer Federation of America.
"There has been a lot of effort to expand homeownership, but if it translates to higher-cost financing, that effect is limited," Fishbein says. "You're not building up equity in a house if you're paying over 10% on your mortgage. It's very difficult to do."
If you're an aspiring 'home owner', what you're about to read will really tick you off.
If you rent, you'll discover that for most Americans, the dream of 'home ownership' is nothing but a cruel, unmitigated hoax.
Take, for example, this report on mortgages from last September:
Roughly half of all African-Americans and Hispanics who bought homes last year are paying above-average mortgage rates, a significant increase over 2004, the Federal Reserve says in a new report.
Overall, one in four home buyers took out a high-priced mortgage last year, double the rate in 2004. The sharp increase was attributed to the rising number of buyers with shaky credit who could afford only small down payments, as well as to changes in interest rates.
* * *
These high-priced, or subprime, loans carry rates at least 3 points above the benchmark rate for prime loans. At today's rates, a subprime buyer of a median-priced home of $230,000 would pay at least $1,547 a month, while a prime borrower would pay $1,163, assuming the buyers could afford a 20% down payment.
"When you see that in 2005 half of African-Americans are paying higher-priced credit, it does suggest there is a drain on the wealth effect of homeownership," says Allen Fishbein, director of housing and credit policy for the Consumer Federation of America.
"There has been a lot of effort to expand homeownership, but if it translates to higher-cost financing, that effect is limited," Fishbein says. "You're not building up equity in a house if you're paying over 10% on your mortgage. It's very difficult to do."
