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How Would an Adjustable Rate Mortgage Affect You?



What is an ARM?

The term ARM stands for adjustable rate mortgage. An ARM is a loan whose rate can, and most likely will, change during the course of the mortgage. The rate on an ARM can go up or down.

Most ARMS contain a period at the very beginning of the loan in which the rate is fixed. The fixed term is generally 1 year, 3 years, 5 years, 7 years, or 10 years, but other periods are available. The shorter the fixed term, the lower the starting rate tends to be. After that, the rate may change, or “adjust” on agreed upon dates, usually it is yearly. So, a mortgage whose rate is fixed for the first 5 years, then adjusts every year afterward, would be known as a “5/1 ARM”. Likewise, an ARM whose rate is fixed for the first 2 years and then adjusts every six months would be known as a “2/6 ARM”. Home Equity Lines of Credit generally have no agreed upon period of adjustment – banks increase and decrease the rate at will whenever the prime rate changes, with no notice to the customer aside from their monthly bill.

When it is time for the interest rate to adjust, banks look at the interest rate environment at the time of the adjustment. At that time, the rate can increase, decrease, or stay the same (depending on the terms of the documents you signed at closing) until the next adjustment time.

The main difficulty with ARMS is that your interest rate may end up being significantly higher than when you first closed. Banks usually put a cap on each rate adjustment, for example, a 2% cap on each adjustment would keep a rate that is at 6% (immediately before that adjustment) from going to more than 8% at that adjustment. Banks also tend to put a lifetime cap on adjustments. A typical lifetime cap might be 6%, therefore in that scenario a rate that starts at 6% at closing can never go higher than 12%.

While these caps help the borrower, they still pose risk because no one knows for certain where interest rates will be in the future. And, even though the borrower may refinance into a fixed rate mortgage if rates are high, in a high rate environment the fixed rate mortgages will be high as well.

Below is an example of how your payment might change with an ARM having a 2% per year interest rate cap and a 6% lifetime interest cap. A 30 year amortization schedule is used.

Sample loan amount: $400,000 Property Value: $500,000

Beginning rate: 6.25% Beginning monthly payment: $2,462.87 principal & interest

+ 667.00 property taxes @ $8,000/year

+ 75.00 hazard (aka homeowners’) insurance @ $900.00/year

$3,204.87 beginning total monthly payment

After rate adjusts upward 2%: New rate: 8.25%

New monthly payment: $3,005.07 principal & interest

+667.00 property taxes @ $8,000/year

+ 75.00 hazard (aka homeowners’) insurance @ $900.00/year

$3,747.07 total monthly payment at 2% rate increase

After rate adjusts to 4% above beginning rate: New rate: 10.25%

New monthly payment: $3,584.41 principal & interest

+ 667.00 property taxes @ $8,000/year

+ 75.00 hazard (aka homeowners’) insurance @ $900.00/year

$4,326.41 total monthly payment at 4% above beginning rate

After rate adjusts to 6% above beginning rate: New Rate: 12.25%

New monthly payment: $4,191.59 principal & interest

+ 667.00 property taxes @ $8,000/year

+ 75.00 hazard (aka homeowners’) insurance @ $900.00/year

$4,933.59 total monthly payment at 6% above beginning rate

So, the difference between the principal and interest payment at the beginning and at the maximum rate is: $1,728.72 per month. And, during this time, you should also expect increases to the hazard insurance premiums (aka homeowners’ insurance) as well as property taxes.

Given the potential for such increases, why would anyone choose an ARM?

Reasons Some People Have Used ARM Mortgages:

Lower initial rate causes lower monthly payments, which helps them get in the property when they might not otherwise be able to do so. They intend to sell before, or soon after, the rate could adjust. They are extremely financially sophisticated and are ready, willing, and able to take the risk inherent in an ARM. They have a high net worth and/or income, and could pay off their mortgage any time they choose

Questions to Ask Yourself Before Choosing an ARM

1. At the end of the fixed rate period, will my household income be significantly higher than it is now, or should I really only expect cost of living increases at my job?

2. At the end of the fixed rate period, do I realistically expect my consumer debt to be much less than it is now? Do I have a specific plan to decrease or eliminate my credit card debt by that time? Do I have a history of spending or a history of financial discipline and saving?

3. What will be the monthly payment when the rate adjusts, assuming that it adjusts to the maximum allowable under my loan terms (generally 2 or 3% over the starting rate and 6% over the lifetime of the loan)? Can I afford this payment with the income & debt I expect to have at that time?

4. What expenses do I anticipate in the near future as well as in the next 5 to 10 years? Replacing your home’s hot water heater, day care, private school tuition, and buying another car are some expenses people may anticipate.

5. Do I plan to sell this home by the time the rate adjusts, or soon after? If so, what might possibly prevent me from doing so and am I prepared to take the risk? Also, am I prepared for house values to go down?


Famous Futuristic George Gilder Weighs BSV Over BTC at Summit



Bitcoin (BTC) Prices Hold Steady After a Severe Turmoil
  • The Summit is held annually to help investors discover new market trends.
  • Gilder highlighted the advantages of BSV over BTC to the current issues.

As per renowned futuristic George Gilder, a “dynamic Bitcoin” that has “really created a miracle in recent months,” BSV is on the verge of becoming the de facto standard for all global currency in the next five to ten years. The Famous futurist gave an online “Six Predictions Summit” presentation to a group of financial experts, highlighting the advantages of BSV over BTC as the answer to the current economic and technical issues.

Framework for New World Order Required

According to Gilder, “immutable, unhackable” Bitcoin and the blockchain have produced freedom from political control currency. “Dual hacking crises” (technology hacking and economic hacking) affect today’s globe. Still, they may be addressed by establishing a new global economy and laying a framework for new world order.

The Six Predictions Summit is held annually to help investors discover new market trends. Due to current travel and other constraints, this year’s event was hosted online instead of in person. Renowned investing trend spotters Jim Rickards, James Altucher, Ray Blanco, Zach Scheidt, and Alan Knuckman joined hosts Doug Hill and Matt Insley on the show.

George Gilder has referenced Bitcoin’s “digital gold” myth at several points. Aside from noting that “the original Bitcoin, BTC” and Bitcoin Satoshi’s Vision or BSV are distinct, he reaffirmed gold’s usefulness as a long-term store of wealth.

Gilder said:

“Bitcoin Satoshi Vision has really created a miracle in recent months, rather than the static Bitcoin, which people hold on for dear life. It’s a dynamic Bitcoin that moves with the advance of technology.”

Despite the fact he called BTC “Bitcoin”, “the original Bitcoin” was not the answer he was talking about. The asset was regarded by him as being of no use to anybody except speculators, terming it as static.

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Is the Future of Real Estate in the Metaverse?



Is the Future of Real Estate in the Metaverse?

Although the metaverse is not a new concept, it has recently gained much more attention. Many are now becoming familiar with the idea, and are looking into what its future offers and how they can be a part of it. The metaverse will completely transform the current way of life for the average individual, affecting work, trade, entertainment, leisure, exercise, social interactions, and everything in between.

Apart from the retail players, big tech companies are also getting into the space. Facebook, the world’s most popular social media platform as of 2021, has recently rebranded to “Meta”, showing its commitment to this new space. According to an official announcement, rebranding was necessary because the company is shifting its focus to bring the metaverse to life. Footwear and apparel giant Nike is also preparing for the metaverse and has signified interest in creating its own space, as well as Adidas, another powerhouse brand.

The metaverse will transform many aspects of life by improving interpersonal interactions, establishing communities, and helping businesses grow. The climate required to create and operate a successful business will also change considerably. Firstly, the metaverse will allow businesses, regardless of size, to establish digital stores for their goods and services. A significant advantage of these capabilities for the average company is that opening a physical store is no longer necessary. This could significantly reduce overhead costs without having to sacrifice customer reach. In a virtual world, a company can tap into wider audiences beyond the physical boundaries imposed in a real-life setting.

There are also multiple metaverse use cases for the entertainment sector. For example, entertainment brands could use metaverse locations to preview music to excite virtual fans, holding mega concerts to listeners around the world. Furthermore, fans may also get the chance to meet and interact with their favorite celebrities, an opportunity rarely possible in the real world.

Additionally, people can gather for leisure activities in virtual parks to play or bond over shared interests and ideas. These locations could replicate attractions available in the real world, engaging all different types of users in the process. For instance, people can build teams based on varying activities, including everything from traveling, virtual combat, or playing chess. The metaverse will offer a slew of new opportunities for individuals and brands alike.

One of the less obvious but very promising advantages of the metaverse is the opportunity to capitalize on virtual real estate. Regardless of sector or industry, the shift to the metaverse still requires individuals and businesses to establish a presence on the metaverse; this is where virtual real estate comes in and plays its part.

All metaverse offerings, including commerce, healthcare, entertainment, and other sectors, must set up shop somewhere in the metaverse to reach their desired base. Individuals can also invest in virtual properties for various reasons, In parallel to the traditional real estate market, Investors can earn profit by purchasing properties and leasing them to businesses and other franchises. Investors can also simply buy virtual properties, hold them into the future, and later flip them for a potential profit. With 500 million dollars sold just in real estate in the metaverse, last year projections state that it will double this year!

The key to making the best out of a real estate investment is getting in early. As with everything else, early buyers catch on quicker and are in a better position to make a profit if and when the value increases. Investors are able to pick their property at floor price in a strategic approach that will allow the potential for a larger profit as well as an easier sale just as investors do in the traditional real estate setting. Users looking to get into digital real estate in the metaverse can start their virtual portfolio and begin with Ethereum Towers.

Ethereum Towers

Ethereum Towers is a community-centric vertical megastructure set in the Ethereum Worlds metaverse. Consisting of 4,388 separate apartments, Ethereum Worlds is a major player in the space available to investors interested in taking an early chunk of the metaverse real estate market as it grows. The apartments in the structure are in two identical towers, each with 101 stories. Each apartment is an NFT on the Ethereum network and is available as an ERC-721 token.

All owners in the Ethereum Towers can use their apartments however they please. Each owner can personalize their space how they wish, giving them full autonomy over their digital real estate asset. For this, the Ethereum Towers offers a marketplace with a wide range of accessories, furnishings, and ornaments that owners can purchase and set as preferred. Since each apartment is available on the Ethereum blockchain as an NFT, ownership is guaranteed and easily verifiable.

Due to the deliberate design, Ethereum Towers apartment owners and guests can explore the social benefits of a large community with similar interests. All residents partake in a virtual social experience supported by meaningful interpersonal interactions. Each tower possesses communal areas where owners can meet and interact, regardless of any preconceived boundaries that would limit interaction in the physical world. Through these interactions, users can build a strong sense of belonging and establish friendships along the way.

Perhaps the most significant advantage to Ethereum Towers is the investment opportunity it offers. In the metaverse, unlike in the real world, digital property assets usually have a much lower entry barrier, making it much easier for interested investors to get involved before the masses. The value of the apartments are projected to increase over time as meta living becomes more popular, providing early adopters a chance to capitalize on being first movers.

Getting In Early

Investors that have been able to identify ideas that dramatically impact the functionality of the future have always prospered. Those who understand the impact and utility around the metaverse too will have a major headstart within the benefits that this realm will offer. With Facebook being one of the largest and most successful companies taking action to rebrand itself as “Meta,” this should give investors a clear idea that a new significant era is on the horizon.


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Popular Analyst Predicts Major Breakout for Ethereum (ETH) on the Cards



Ethereum To Reach $20 Trillion by 2030 as per Ark Invest CEO Cathie Wood
  • Ethereum’s price has rebounded from a two-month decline in the last week.
  • Partisans are bullish on ETH 2.0 and are targeting a price of $8,000 shortly.

Since its January lows, the price of Ethereum has risen almost 50%. The Ethereum blockchains native token, Ether, has recently shown indications of resurgence. The altcoin is benefiting from several fundamental factors.

ETH/USDT: Source: TradingVIew

Ethereum’s price has rebounded from a two-month decline in the last week and has already reached the $3,000 mark. Cryptocurrency analyst Benjamin Cowen predicted a significant breakout for Ethereum (ETH) this week. According to him, the ETH price range between $2,000 and $4,000 represents a major re-accumulation zone for a medium-term runway of higher prices.

Upcoming ETH 2.0 Crucial

It’s also predicted that the network’s different offerings would show greener candles. Additionally, Partisans are bullish on ETH 2.0 and are targeting a price of $8,000 shortly. As the price of ETH continues to rise steadily, the fear and greed index for Ethereum weighs more heavily on the greed side of things.

Every obstacle on its path to the $3,200 mark on the daily chart has been overcome by Ethereum. Bulls are fully expecting the next price drop to be taken out by them. Aiming for the $3,600 level, investors have successfully crossed the 50 SMA and the bearish sloping line.

More than 45 percent of Ethereum’s value has been wiped off since its all-time high on November 10. Since its November high, Bitcoin, the world’s most valuable digital currency, has fallen by more than half. However, prices reversed their downward trend in February.

However, if pricing fails to hold above $2,800 in the next few trading days, we might witness a further decline below $2,400. According to CoinMarketCap, the Ethereum price today is $3,195.23 USD with a 24-hour trading volume of $13,485,593,739 USD. Ethereum has been up 3.84% in the last 24 hours.

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