I hear people talk about how interest rates will rise, but the economy seems pretty good. What is the truth about financing our debt through foriegn capital?
199702
The national debt is actually something that is undermining our national security by handing over a very large portion of our economy to foreign powers.\n\nIn international finance, everything is balanced through a very complicated system including value of exported and imported goods, value of currency, value of precious metal reserves (gold & silver), and other valued goods. When the US spends more than it makes as a nation, there are several things that could happend: 1. Other countries step in and "loan" money to the US through the purchase of Treasury Bills (T-Bills); 2. The US dollar is devalued (i.e. goes down compared to other currencies).\n\nRight now, foreign nations are purchasing T-Bills in order to loan the US the money that it spends. Basically, the T-Bill is a note that promises the purchaser that the US Government will pay back the money owed.\n\nThe problem is, when other countries have large amounts of these T-Bills, they effectivly control the US economy by the threat of dumping the t-bills onto the international market. For instance, if China decided that it really didn't want the US to supply arms to Taiwan, it could take all of its T-bills and dump them in the international market. Overnight, the US Dollar would plummet, thus raising the cost of imported goods in the US. The result is that $5 t-shirt made overseas now costs $10. Inflation would be rampant, businesses would shut down, unemployment would rocket up, and the US economy would be in tatters in a matter of weeks.
401127
This is indeed a "booming economy".  I have heard the people of Haliburton say it a number of times.  Seriously, I am tired of people trying force feed us that the economy is doing so great.  It is not.  There are a number of problems with it.  Here are just a few.\n\n\n a one trillion dollar war\nout of control spending in government\nrecord numbers of foreclosures\ncollege tuition and health care costs doubling\n20% of Americans owning 80% of the stock\nrecord deficits in spending\nnational debt doubling\ntrade deficit every year for the past 30 years\nmillions more in poverty every year\nhalf a trillion dollars a year spent on interest this year on \nnational debt. yes, that was just the interest.\n"real income" down each of the last five years\npersonal savings at an all time low\n\n This doesn't sound like America.  Unfortunately it is.
623981
Ignoring the Bush-bashing despite how much I might like it.\n\nRepublicans nowadays are "pro-business" or basically in economics "supply-siders".  It's a view where if the means of producing things, in this case businesses, are able to produce more, it will benefit the economy with higher production and lower prices.  Now, if the minimal wage was to be increased, where is that extra money going to come from?  The pockets of business owners and companies.  This means a higher cost for them which would mean that they aren't making as much money.  Since they are not making as much money, they will make less, creating higher prices from shortages and too much demand.\n\nOn the other hand, if we did have an increase on minimal wage, it could lead to higher inflation.  Companies may want to increase prices to soak up the extra cash.  In addition, it would be up to the Federal Reserve to control the inflation.  They may choose to do so by increasing the reserve requirement, making it harder for you to get a bank loan.  They may also choose to increase the prime interest rate, increaing all other interest rates elsewhere, hurting everyone in the economy.\n\nThe economy is a fickle, little thing.
193061
Basically your bank will loan you money based on the value of your property. There are loan ratios so lets say they have a 10% ratio (I think thats normal although others demand more or less depending on the area). That would mean you can borrow up to 90% of the value of the house. If the house is 100K you could borrow 90K. Now if you only owe 50K because you bought it a a few years back and it has gone up in value then your bank will lend you up to the 90K (or an extra 40K) for you to do whatever you want with. Its a cheap way to finance debt for purchasing things like cars, holidays, extensions...than using a credit card or personal loan BUT it means you are putting those things under your home loan and if you dont or cant pay then they reposses your home. You would start by going to your bank and having the home valued by a professional they recognise to see how much you could borrow. A good bank will pay for this service for you as long as you take out a loan with them. You generally set up a new loan (which means a new fee) and then your back to normal. Your home loan repayments will go up but they should be able to calculate these for you so you know what to expect. Remember interest rates are on the rise so factor that in. Happy spending.
218058
The Fed is still raising rates.  The country is at war (always creates inflation).  Unemployment is low and the economy is booming.\n\nRates will go up.
340699
I say go for it. I did when I was at school. I had excess student loan money after all my tuition had been paid. Made an excellent return on investment. as to the poster who says you should never borrow to invest...that is just madness...EVERY business borrows to invest (when a company issues bonds there are borrowing money from investors at a lower interest rate and investing it at a higher interest rate)and even the government does it i.e. Treasury bills are used to fund government expenditure. as a word of caution though don't invest in stocks. the stock market is not predictable. you are better off with a CD/Treasury bill or a municipal bond
503605
Since you're actually asking this question, I'm going to assume (dangerous thing) that you will be disciplined in your use of your dollars.....\n.... pay off the cars.  And don't go getting car loans any more.  Apply the extra $220 toward the 20% 2nd loan, and pay it off early.  Instead of re-financing, you'll just be left with the 80% loan at that point.\n\nInterest rates go up and down in cycles.  They've been at the bottom of the cycle for a good long time now.  In a few years, don't expect or plan on them being lower than today.\n\nGet the best interest rate you can on the 80% first, and plan on keeping that loan.  Pay off the 20% 2nd as fast as possible.
209295
We won't go into a depression.  We could go into a recession though, a really bad one.  If the economy ever took that type of tailspin again (I assume you are referring to the great depression of the 1930's), it would be devastating to our country!  It would also affect the world economy is a big way!!  Back in the 1930's, the U.S. nor other countries, did business together (loaning money) the way they do now...so it is nearly impossible to compare what happened then to what would happen now...but it would be very very bad.  Interest rates could shoot WAY up...at recent as the 1980's interest rate for even home mortgages were in the middle teens...what do you think would happen to the average American that carries mortgages, huge credit card debt, etc....the interest on these loans alone would way surpass what people are paying right now on principle and interest.  Many people would lose EVERYTHING!  But as in the 30's, the folks who have lived conservatively and have money saved would make out like bandits.  Their money would be accruing interest at those high interest rates and all the items that are repossessed would be able to be purchased at a fraction of their worth.
103369
Fed impacts the economy with monetary policy through raising and lowering interest rates. The discount rate is the rate sets the interest rate for lending- and the government short term and long term bonds. \nRaising rates makes borrowing money more expensive (think of your credit card, or home loan, you want rates low because you'll borrow and spend more)- spending more fuels growth in the economy. \nHowever this needs to be balanced in order to curb inflationary pressures (where prices increase because of demand pull, or cost push). Having too much money sloshing around in the economy can create havoc in the economy because without keeping it in check, too much money will eventually lower the value of that money (think diamonds or something, the rarity creates value). \nThey have raised rates because:\n1. They are showing they are optimistic about the growth of our economy- raising rates signals they think our economy is growing, not slowing.\n2. They are also raising rates because globally, other countries are also raising rates and in order to keep attracting foreign banks/investors to hold our bonds (or debt) we need competitive rates. So if you want more info on what the foreign direct investment means, email me. Seems you're focused domestically.\n\nWhen will they maintain the existing level?\n- it depends on the growth of the economy\n- no one has a crystal ball- but if oil prices continue to increase and the fed doesn't want to lower interest rates, he could keep it steady instead of sending the signal of lowering rates (which would seem like a slowdown in the economy).\n- they will lower it if the expansion of our economy slows significantly- right now we are around 1.8% per quarter (double check- was in Wall Street Journal a couple of days ago). If the quarterly growth of GDP begins a downward spiral, then lowering interest rates will hopefully help reverse that trend (meaning fuel people to borrow and spend).\nHope this helps
536278
Sure.  Depending on what you need it for and your actual credit you will probably pay a high interest rate though.  Check the links here for some help.
401698
Its really impossible to predict accurately, but I would expect it should have a resonable improvement. \n\nYou should consider building more credit. \n\nhere is a good article about building credit the smart way: http://www.expert-credit-advice.com/building_credit.htm
461824
Most of those facts are incorrect. \n\nOil prices up until two months ago were the highest since the mid 1980s (relative to the dollar value). The price drop pre-election has already started to reverse, by +10cents in the past two days.\n\nSure, taxes are lower. But deficit spending has been at an all-time high, and the federal national debt has more than doubled in the past 6 years alone. In other words, we're gotten more in debt since Bush took office than in the past century before that.\n\nInflation is maintaining roughly the same rate as the past 15 years.\n\nYes, home values are double what they were five years ago. Which means that half as many people can afford to buy a house.\n\nForeign terrorist attacks on US soil occur on average every 7-9 years. So, the current regime doesn't get any credit for not blowing that by having one occur sooner.
315429
sounds pretty good to me\n\nthe national average for a 15 year loan is currently 5.85%
640523
The mailings you've been getting are about "loan consolidation." It basically goes like this:\n\nThe rates on your current Stafford Loans are inherently *variable* -- that is, they are "reset" (i.e. they are changed) once a year (on July 1st) by the US federal government.  This past year, the rates were 4.7% for students in school (or in deferment, or in their grace period) and 5.3% for students in repayment.  Starting TOMORROW July 1st, the rates are going to increase by 1.84%. \n\nAll borrowers will be automatically subject to these rate increases. The only way to NOT be affected by them is to apply for Federal Consolidation Loan.  In effect, when you consolidate, your lender will take your variable rate loans and combine them into one big *fixed*-rate rate loan.  It's still a federal program and the rates are still set by the federal government, but the primary difference is the fixed rate.\n\nAs with any financial decision, there are pros and cons to loan consolidation. In general, consolidation is a good thing: not only does it offer fixed rates, but it also allows borrowers to extend their repayment term beyond the standard 10-year repayment term that most students loans (Stafford and Perkins) carry. \n\nKeep in mind that, once you have consolidated, you won't be able to UNconsolidate. So, yes, you would be out of luck if the rates decreased dramatically. While it is *possible* that rates will go down sometime during the 10+ years that you are in repayment, it is more likely that the next few years of your repayment period will be spent watching variable rates increase. While no one can predict the future, it is very unlikely that Stafford/PLUS loan interest rates will ever reach the historic lows that they dropped to a few years ago. \n\nOne "con" of consolidation: You will generally lose your grace period if you choose to consolidate. You do need to think long and hard about whether this is a loss that you are willing to endure. Financially speaking, you're looking at the difference between (a) being able to lock in a 4.75% interest rate on your Staffords or (b) watching the rates rise to 6.54%, then 7.14%, then whatever the government decides to set them at for 2007-08). If you can handle losing your grace period, it's worth it to lock in that 4.75% (you might even be able to get a bit of an interest rate "break" depending on who you consolidate with).\n\nNOW, although I almost always recommend consolidating Stafford Loans, your Perkins Loans are a separate issue. Perkins loans are FIXED-rate loans (they've been at 5% for *years* and there is no indication that this will change). \n\nPerkins carry additional "benefits" with them that might be lost in a consolidation situation. For example, Perkins Loans can be cancelled in full if you enter one of several career fields (law enforcement, teaching, etc.). The interest on [unconsolidated] Perkins Loans is subsidized during any in-school/grace/deferment periods, so if you went back to school or applied for a economic hardship deferment later on, your interest would temporarily stop accuring. If you consolidate the loan, these cancellation benefits and interest subsidies would no longer exist.\n\nMoreover, if you consolidate your Stafford loans *together* with your Perkins loans, the lender will calculate your interest rate by taking a "weighted average" of your loans' current rates, so your rate could be anywhere between 4.7% and 5%. \n\nIt's up to you if you want to consolidate Perkins. Perkins loans by themselves carry a "minimum" payment that you must pay. Naturally, if you consolidate it, the minimum doesn't apply, so usually by consolidating Perkins, you will be able to lower your overall monthly payment on the Consolidation Loan. So, if you want to leave Perkins out of the mix, be sure to ask yourself if you think you can handle the larger monthly payment. \n\nG
467394
raise interest rates.
53969
There is in fact a law but it has a high limit. I think its something like 33% over current prime rate. this could mean interest as high as 39%.
336492
Interest rate has been going up regardless whether you are using libor or other interest benchmarks.  At this point even if you refinance you won't get that good a rate, plus the penalty you will have to pay.  Most lenders will allow you to extend your mortgage amortization period and keep your monthly payment the same.  Talk to your lender and see if it is an option.  My other advise is to make extra payment whenever you can.  Good luck.