Adjustable rate mortgage you say? Isn’t that what caused the housing “great depression” you keep seeing in your local papers and TV broadcasts?
Well folks, fankly I am sick to death of all the gloom and doom the irresponsible media has been pouring down on us for nearly 16 straight months. Must be an election year.
Yes, the housing market completely stinks right now. No arguments there. I want to move too and can’t because the buyers off hiding till the sky is no longer falling.
You see, the real facts are that nearly 98% of ALL home owners are making their payments on time. Yes, you read that right. Not quite 3% of all home loans in the U.S. are actually in default yet the media would have you all believing we are heading into the great depression.
The adjustable rate mortgage can be largely to blame but even that in and of itself was not the cause of the so called housing bust. Greedy investors. Greedy and underhanded banks and just plain stupid people who got in way over their heads are largely responsible for what we have seen.
Now they…and a ton of us are paying for it. But it doesn’t have to be that way and I predict that the not to distant future will bear me out.
ARM’s are still around. They haven’t been quite as popular not only because of the bad press and tighter lending requirements but also because they just have been a very good deal.
At the beginning of 2008, the 5/1 are rate was less than a quarter point than that of a 30-year FRM. (A 5/1 ARM is a fixed rate for the first five years and then adjusts every year after that. That difference has nearly doubled as of last week’s mortgage rate survey which can be a great thing concerning your monthly payment.
Go ahead and use our mortgage interest calculators and figure it out! As an example, carrying a mortgage balance of $250000 you would save $5000 on interest in your first 5 years of the loan compared to a fixed 30 rate of 6.6%.
One of the keys here is the 5 year term in which so many lame brains did not consider. Taking out an adjustable rate loan in which you face rates changes within the first couple of years was suicide in this market. Those who took the 5 year options are doing well right now and I wages will make a profit when the markets return.
And they will return. They always do and this is not exception. If you are still sitting on the fence I wouldn’t wait until I got slivers in my butt if I were you while considering to buy a house. You will never find deals out there like what is going on now and I believe the bottom of all is close if not already here.
Depending on your circumstances and you financial portfolio, now may be the perfect time to get on that mortgage interest calculator and figure out if an adjustable mortgage makes dollars and cents to you.
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