Are we preventing foreclosures through any social programs? Why do americans have to pay interest?

Question

I mean it is our money, from our government, why do we have to pay interest on house loans and student loans?

How do i find out if all govts charge interest to their people...

Answer 1

The government doesn't generally loan money for student loans or mortgages. They guarantee loans meaning if you default, they will pay the balance. That is much different than actually loaning the money. We pay interest to the private investors who loan the money. The theory is that this interest will be a little lower because of the lower risk and some people who otherwise would not get loans can if they are guaranteed.

Answer 2

First of all, if you are talking about why the government pays interest on the national debt, which is money it borrows from the Federal Reserve, that is because is not our money. In 1913, the Congress transferred the right to print our own money to a network of banks called the Federal Reserve System, and charged them with regulating the value of our money. The Fed is a network of private banks owned by other private banks, and is not a government institution. The government pays interest on the money the Fed creates, which is also why we have an income tax, which was created in 1913, as well.

Otherwise, the government would be able to print its own money and we wouldn't pay interest to the Federal Reserve. It's debatable whether the government would be any more prudent with its regulation of money, but at least it would be in the hands of the government, instead of private banks.

Now, if you are asking why we have to pay interest on money we receive from private banks for mortgage loans, that is because we borrow the money from a private entity. If you walk into your local bank and ask for $100, they may want you to pay back $110, with $10 being the interest they charge. You don't have to borrow from them, it's entirely voluntary. Save up for a few years, find a bank that charges less interest, or borrow from a friend or family member and pay no interest at all.

But if you voluntarily enter into a voluntary contract to pay voluntary interest, then you have to pay interest, whether it's a mortgage, student loan, or otherwise.

Answer 3

You are a little confused. It is not the federal government you are borrowing from when you take out a student loan. You are borrowing from the bank itself with the federal governments guarantee. The same would apply for a federal home loan. So why would a bank make a loan and not charge interest? Don't the financial institutions have the right to make a profit for their assumption of the risk? Sure they do.
I've seen a few banks do a short term no interest loan. When that happens you usually pay a 'service fee' or a 'handling charge' up front when you take out the loan. All that is, is the bank taking out their interest payment right up front.

Answer 4

There are two kinds of people in America. Those who collect interest and those who pay it. Rent is interest on property. You are asking very fundamental questions about an economy that runs on usury that are not likely to be popular among reactionaries who have never experienced anything else. If you want some real fun open their Bible and read what is says about usury. The massive foreclosures that must occur from irresponsible lending practices to increase profits will probably have to be addressed by government intervention.

Answer 5

I must have missed something, when did mortgage companies get taken over by the US government? First time home buyers can get FHA loans that are somewhat guaranteed by the government. The guarantee is to the lender, not the borrower.

Answer 6

Why charge interest? First, loans aren't from our govt. It is from commercial banks who run companies that need to make profits, because shareholders (millions of Americans) gain wealth that way.

That's the layman's version.

Answer 7

most people that are foreclosing are doing so because of poor money management or living beyond their means, not because of unavoidable circumstances so no they should not be bailed out.

the banks are the ones who give out loans and collect the bulk of interest, its how they pay their bills and make money and im sure its pretty much the same way everywhere. got themselves into trouble because they were giving out too many loans to people with bad credit, and now it is biting them in the ***

Answer 8

you're actually not listening no longer basic sufficient. There are hundreds and hundreds who do no longer choose those issues. they choose much less high priced healthcare, no longer nationalized, socialized, government run healthcare. they choose greater desirable public colleges meaning get the feds out of it and supply the ability back to the states the place it belongs. greater desirable roads are in part the feds accountability. The interstate highways fall below their jurisdiction. we don't techniques paying taxes for the valid purposes of government, however the feds have taken too lots ability and syphon too lots money from state and native tax bases. in the event that they might purely come back to doing what the form facilitates them to do, they'd not ought to confiscate lots money from actual everyone. Then there could be additional money for state and native governments so as that they'd not ought to tax at such intense rates. that could desire to go away greater for you and me to spend or save as we see fit(in line with possibility for healthcare which might additionally be greater much less high priced using diminish tax burden). Now would not that sound like freedom?

Answer 9

without interest there would be no mortgages anyway. you would be living in government owned housing with little hope of owning your own home. buyers who made bad choices must take their medicine.