*** First of all --- the LOW INTEREST RATES you keep hearing about are the SHORT TERM LENDING RATES that the PRIVATELY OWNED FEDERAL RESERVE charges member banks --- this rate is currently at 1% and it is an interest rate YOU WILL NEVER SEE!! ***
Correct.
*** Presently, mortage rates have been GOING UP and NOT down as you have been lead to falsely believe. ***
Incorrect. Mortgage rates have only recently started going back up after years of a steady decline. Mine is now 4%.
*** The reason why they have been GOING UP is because the sale of TREASURY BILLS have forced the rates back up. Just in the last two weeks alone, the interest rate for mortgages has been raised by 1%. ***
True.
01) Home Mortgage (compounded interest) CORRECT 02) High Interest Credit Cards (compounded interest) CORRECT 03) Interest earned on your money (SIMPLE interest) INCORRECT. I know of no financial institution that currently offers this antiquated product. It went out with the 8 track. NOTE: Compounded interest is compounded DAILY, and SIMPLE interest is compounded ONCE A MONTH! CORRECTKent,
Banks are a business. They provide everyone the ability to purchase large (expensive) items because most people don't have immediate access to $10 - $20K for a car or $80 - 150K for a new home. Of course we have to pay interest to the banks. This is how they make money. The more money they make, the more money then can loan to their customers. If it weren't for banks no one would have enough money to much much of anything above $1,000. Then what would the unemployment rate be? Think of the repercussions.
