In an environment of rapidly rising commodity costs---with the stories of municipal bond insurers on the ropes----with the vision of the 80's with stagflation on the horison----you are offered a mortgage for 5 years for two million and then you will have to "renogiatiate."
Normally you would laugh in response to the bank offer. There was no explanation offered at the recent presentation at City Hall.
Do you think rates will be higher or lower in five years?
Here is the bottom line. From a purchaser point of view, or the citizens point of view----a five year mortgage with baloon is not the preferred choice because it creates the interest rate risk at the five year mark when things could be a lot more expensive. Better to lock it in now.
Hence: I wonder why our Fire Hall went this route?
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With the all knowing collective Oz at the helm, who are we to question? The track record of decisions within this city speak for itself. It's not like there are any recent examples of problems with this type of "mortgage" ( read scam ) in this country. I honestly feel like the city is being run by the Magic Eight Ball I lost when I was 11 years old. Outlook not so good.
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