Are adjustable mortgage rates good or bad? It all depends on your circumstances. For example, long term financial goals usually require fixed rates. However short term goals may be served well with loans that adjust. You see, it is all a matter of picking the right tool for the job.
There's rarely been a loan product like an ARM so consistently misused by mortgage professionals and misunderstood by mortgage borrowers.
For decades, lenders oversold low teaser rates to attract consumers. Homeowners and home buyers loved the low initial rates but failed to prepare for payment increases.
Then during the previous real estate market with soaring home prices, some lenders helped buyers purchase more than they could afford by offering designer loans which were merely a low downpayment, adjustable rate program with minimal initial payments. Consumers inappropriately failed to plan for rising house payments and decreasing home values ... all part of normal real estate cycles.
Lenders and homeowners used a valuable tool for the wrong job. So to repeat my original question. Are adjustable rate mortgage loans good or bad?
My answer? Adjustable rates are a tool, appropriate under some circumstances and inappropriate under others. It all depends on your goals.
You can break the cycle of mortgage foreclosure and plan for your future by understanding your adjustable rate mortgagepaperwork. Then learn how to create your personal long-term solution to adjustable mortgage rates at A Powerful Cure For Subprime Mortgages.
You can also ask Kate which mortgage tool works best for your circumstances. In fact, here is an example of a question I was recently asked: Is there a loan program out there that will just fix our interest rate?
Do you have questions about your adjustable rate mortgage? Every question is a good question!
Read the following questions and comments from other readers as well as my answers. Remember, you can ask a question or add a comment too!
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Regarding Adjustable Mortgage Rates Advice: Kate, Adjustable mortgage rates had dropped about 2 percentage points from when we purchased our first house. …
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Now go to 30 Year Fixed Rate Mortgage to meet the King Of Mortgages. Or ask Kate a question!
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