You keep hearing about the "credit crunch". Credit has "tightened" since lending has gone from "incredibly stupid" to "kinda dumb". From 1996 to 2007 loans were made based on inflated values and future increases - not on ability to repay. People took first mortgages, second mortages and refinanced their home borrowing to 100% (or more) of the equity in their home to buy cars, motorcycles, vacations, appliances, etc... There are a lot of 30 year loans on cars and vacations out there.
The idea of having to have a minimum 20% down (or equity) in your home was considered out of touch. I have friends that have owned their home for 15 years and now owe more than its worth instead of being close to paying it off. They bought a house for $200,000 and refinanced or took home equity loans several times, the last refi being in 2007 for $360,000. They took the "cash out" amount and bought a Yukon Denali and a took a family cruise. Now the house is down to $290,000 and the Yukon is worth less than half what they paid for it. He's had job offers but can't take advantage of them because they can't sell the house. What's funny is this husband and wife are both teachers complaining about how little they earn.
The economy is contracting at an "amazing" rate because previously so much of it was being financed through paper gains that were never realized. Now not only can people not "borrow up" they have pay for what they already have - the days of borrowing the appreciated value out of your home are mostly over. If you heard the "consumer credit" borrowing rate had the largest contraction ever seen in a single month last month. People are "sucking it up" and going back to living within their means (some because they have to and others because they see the need to).
Credit is out there and if you are "credit worthy" its a great time to borrow. However, look out for some big jumps in interest rates in the next year. Even the Chinese have quit buying our T-Bills and the Fed is now buying them with money they are creating from thin air. This is the first time since the 1960s the Fed has done this and with trillions in annual deficits the reaction is going to be pretty hard. People are estimating home mortgages to be in the 8% to 11% range in 18 months - I think it may be closer the 14% - 20% range. It will make the current economic "pain" look mild in comparison.
We sell tractor parts! We have the parts you need to repair your tractor - the right parts. Our low prices and years of research make us your best choice when you need parts. Shop Online Today. [ About Us ]
Today's Featured Article - Listening to Your Tractor - by Curtis Von Fange. Years ago there was a TV show about a talking car. Unless you are from another planet, physically or otherwise, I don’t think our internal combustion buddies will talk and tell us their problems. But, on the other hand, there is a secret language that our mechanical companions readily do speak. It is an interesting form of communication that involves all the senses of the listener. In this series we are going to investigate and learn the basic rudimentary skills of understanding this lingo.
... [Read Article]
Latest Ad:
2022 John Deere 5045E, 4wd, front end loader and 3rd function with grapple. 120 hrs, 55k new, must sell
[More Ads]
All Rights Reserved. Reproduction of any part of this website, including design and content, without written permission is strictly prohibited. Trade Marks and Trade Names contained and used in this Website are those of others, and are used in this Website in a descriptive sense to refer to the products of others. Use of this Web site constitutes acceptance of our User Agreement and Privacy Policy
TRADEMARK DISCLAIMER: Tradenames and Trademarks referred to within Yesterday's Tractor Co. products and within the Yesterday's Tractor Co. websites are the property of their respective trademark holders. None of these trademark holders are affiliated with Yesterday's Tractor Co., our products, or our website nor are we sponsored by them. John Deere and its logos are the registered trademarks of the John Deere Corporation. Agco, Agco Allis, White, Massey Ferguson and their logos are the registered trademarks of AGCO Corporation. Case, Case-IH, Farmall, International Harvester, New Holland and their logos are registered trademarks of CNH Global N.V.
