Posts Tagged ‘mortgage lending’
Over the past year, there has been a lot of information about Adjustable Rate Mortgages (ARMs). Several publications and news outlets have said that ARM loans are the reason for the mortgage crisis that started in 2008. Many also state that ARM mortgages are the reason for the high foreclosure rate.
Though some of the information is true, ARM loans have received a bad rap during this process. Yes, ARM loans are not for every homeowner and you should only consider an ARM mortgage as long as you know the terms of the mortgage.
Below are some reasons why one should even consider an ARM loan.
First off, you must ask yourself how long you plan on keeping the mortgage or staying in the house. The average American stays in their home about 5-7 years before they sell or refinance their property. The average home owner only keeps their mortgage loan for about 5 years as well.
Since several people only keep their home loan for a short period of time, that was the basic design on an ARM mortgage. The ARM loan gives you a reduced rate than a FIXED rate mortgage for a period of time. Once the lock period ends, then the rate can change.
Keep in mind that how long you plan on keeping your loan or home can play an important part in your decision to go with a FIXED rate or an ARM loan. For example, if you plan on staying in your home for 5 years and the current FIXED rate is 5% while an ARM rate is 4.5%, then by going with a 5 year ARM could save you thousands over the first 5 years.
A FIXED rate loan is a perfect option for people that plan to stay in their house for a longer period of time. If you are uncertain of how long you plan on keeping your house, then a FIXED rate mortgage would give you the peace of mind of knowing your rate and monthly mortgage payment would not change.
ARM mortgages are a great option if you understand the loan term itself and are used for the right reasons. A few people that have ARM mortgages now have actually seen their interest rate drop. The terms of how the rate changes will be in the loan note. Each ARM mortgage is not the same, so it is crucial to understand how the rate is calculated once the mortgage goes into the adjustment period.
Here is a reasons to never do an ARM loan. If the only way you can qualify for the mortgage is to go with an ARM loan, this is not a good reason to do an ARM loan because once the mortgage adjust, you might not be able to make the new monthly mortgage payment.
For the most part, what got home owners into problems with the ARM loans is that they did not understand how their monthly payment would be affected once the mortgage went into the adjustment period.
David White is a Sr. Mortgage Consultant who specializes in home loans. He has over 12 years experience helping his clients with Southlake home loans
Are you planning to sell your home sometime soon? If you are getting ready to put your home on the market, you want to be certain to get as much for your home as possible. Fortunately, there are several simple steps that you can take to make this happen. Here are five ways to sell your home for top dollar.
Tip #1: Improve Overall Condition
First of all, make a good first impression on buyers by making it look great from the curb. Paint is cheap, compared to most home improvements. So, I always recommend exterior trim paint or even painting the whole house. Certainly get the exterior doors painted, including the garage door. Then, plant flosers and trim bushes and trees. Make the yard look clean and healthy.
Tip #2: Get Proper Exposure
To get that top price you need to attract many offers. To attract many offers you need to contact many buyers. To do that you must use every form and method of communicating to the buyer market. That means local stuff and global stuff. These days, your buyers may be searching from another city or even another country.
Tip #3: Choose the Best Time to Sell
Of course it’s best to wait for a seller’s market. But, that’s not likely these days. Still, you can maximize your profits by selling at the most active time of the year. That’s always in the spring and summer months as well as early in the fall. You’ll want to stay informed about mortgage interest rates and terms in order to be on the market when conditions are best for your potential buyers. Just a small drop in rates can increase the number of buyers in your price range significantly.
Tip #4: Don’t Stay on the Market Too Long
Price and market the home to sell quickly. It’s the only smart strategy in a declining market. In fact, agents and buyers view homes that linger on the market longer than average as “stale”. That is, they immediately wonder why others have not purchased the home and they often do not even tour. If you do “miss the mark” on price or advertising, and the home remains on the market longer than average, you may want to take it off the market for a time and start over with a fresh price and marketing effort.
Tip #5: Choose a Reasonable Price
Resist the temptation to overprice. It’s a winning strategy in an expanding market but it’s the kiss of death in a declining or flat one. First of all, you will not get the number of viewers online and live tours that you want. Internet auto-searches are entered by price-range and you’ll simply miss out on contacting some appropriate buyers if you price it higher than is reasonable.
So, it’s really pretty straightforward. These Five Steps will help you get the most for your home.
About the Author: John Allen represents buyers and sellers of fine Sarasota real estate, including condos. Also, special thanks to the team at Rancho Santa Fe Real Estate.
