Monday, March 17

Talk on Interest and Mortgage

It has been in the news almost everyday that the working class who pays Mortgage on their house are experiencing difficulty. The interest rate is rising up due to inflation (more of the sub-prime interest rate). It was said that it could get worse before it gets better. And so the mortgage payer have to let go some luxuries if they have any and sacrifice a little to cope the increasing mortgage payments - maybe escaping holidays this year until the coast is clearer.

The rising interest rate is good for those who have cash investments though.

I know somebody who had been paying big mortage every month - I tell you, they're just paying the interest and it was huge. Well, the principal was also huge so what can you expect? Anyway, they sold the property and has now something sitting in the bank that earns interest everyday.

So if before they're praying for the interest to go down, now they're praying for the interest to go up, they're on the other side of the boat now. But no, they're not really praying because the prices of the commodities have also gone up. It's a catch 22 situation for them. But at least, paying high mortgage is not taking toll on them now.