Debunking the story about low mortgage interest in the United States

Debunking the story about low mortgage interest in the United States
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As always, the subtleties are in the details.

First - give and then you’ll receive.

Quite a regular comment to such articles reads something like the following: Well, even if the apartment costs $ 500,000, but the mortgage is at 4% per annum! Yes, it is absolutely true - a mortgage at 4% per annum in the United States is quite possible. However, not everyone can get their hands on it.

Let's take it from the top. In America, you can often hear the instruction of older relatives and parents to a younger generation: Take care of your credit history from your youth. There is no reason to dispute this fact.

The credit history of an American (or any emigrant who wants to become one) begins with the receipt of the first credit card. How many bank cards does an ordinary citizen of the United States have? It usually ranges from 5-10. How many have you personally got?

Take out a loan and create your own credit history!

Under this slogan, millions of residents of the "shining city on the hill" daily climb into more and more loans. However, the rates on credit cards are significantly different from the cherished four percent.

According to statistics from the FED, the total debt of American households in the second quarter of 2019 was 13.86 trillion dollars! This is more than 75% of American GDP.

Every average American OWES an average of $ 68,305. To understand the scale of this phenomenon, we need to compare it to some other countries. For example, in Russia at the end of 2019 this amount is $1,590 per citizen. We are going to provide you with a shortcut if you don't want to count - the difference is 43 (!!!) times.

Another bit of strong sobering data

In the first quarter of 2013 alone, the number of homes seized for debt increased in the US by 9% to 1.5 million houses! As a debt.

Here are some more numbers. The total debt of Americans is more than 75% of the GDP of the country. This is about someone who is up to their ears in debt.

Even more interesting is the structure of the loans. According to official statistics, US residents take out loans to buy homes. It is common knowledge that the majority of Americans live in either rented or mortgaged housing. Some say it may be up to 85% of the population. An new migrant to the USA managed to take out two credit cards with his wife, was able to get a mortgage at only 11% including all hidden payments. At the same time, in Russia it is possible to have a mortgage at 9.5%. Because the coveted 4% is given to only those who have already managed to feed the banks enough with their hard-earned money. It is necessary to understand a simple thing - in the West, no one is going to give you anything for free. No wonder, Capitalism has been developing for 300 years.

Only after a person took out a few loans at 15% interest and has been making payments on them for 5-8 years, and only after the banks get quite a bit of money from the client (considering this money to be their own), only then would they be willing to offer a “low” mortgage interest.

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