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Originally Posted by irishgrl
Whatever you do people DONT GET SUCKERED IN BY CREATIVE FINANCING!
it is EVIL! ARM's and the like sound really good but people dont take into consideration that rates will rise, and then they are stuck with a house they cant pay for. Some people buy a home thinking they will somehow make the balloon payment at the end of the term and guess what folks? it would take a miracle or incredible restraint (as in putting aside a certain amount every month on TOP of your monthly payment)
I myself got lucky, I got in two years ago, the rates were still reasonable and I got 30 year fixed, w/impound account so I dont have to come up with extra for taxes twice a year. you cant beat it. and I told my broker what my max monthly payment could be and he did it! so..........I predict a flurry of last minute buying.....or not  |
Well, that is not exactly true. Many ARMS are fixed for a limited amount of time and have a cap. For the investor using OPM (other people's money) for the putchase price - they are a good idea because you can buy more on spec. at 4.91% than you can at 6.5% and you are going to sell the house in two years anyway if you are taking advantage of the no cap. gain tax per owner occupant of any profit under $250,000 after two years. Also, if the ARM goes to high, you can always refinance at a new ARM or fixed mortgage with a likely lower rate. To be sure, ARM's are not for everyone, but that are not de facto bad, which you prob. knew but I wanted to go on about it to show how smart I am
