Finding a $weet $pot in a Mortgage
Posted April 19, 2017 in Real Estate Trends
Getting the keys to your new home can be closely tied to your lender’s ability to unlock the best loan for your situation. Lenders should be looking at many ranges of options beyond the income from a full-time job for those served best. Income can include irregular paychecks from self-employment as well as from assets that can be categorized as investments and can lead to keeping more money in your pocket in buying a home.
If getting into your first home or even into a retirement home is the main goal, there are some very sweet spots to be found within adjustable rate mortgages. Even with interest rates on the rise, adjustable interest rates remain in check and can offer a buyer more of a house for less money.
Why is it sensible to consider adjustable rates? While adjustable rates have long been known to work for home buyers who expect to move in the early years of the loan; these loans should be considered thoroughly for borrowers who know that their income will rise or for those who know that their money will provide a better usefulness somewhere else. This was very much my experience when I recently utilized an adjustable rate loan to bridge a gap between the purchase of a home and the sale of the other. That experience provided access to cash that my family needed in that time.
One of the places that I am writing about using money for something more useful is in the May edition of the Columbian Home Book. Look for my article on the first Saturday of May in the Spring Home Book inside the Columbian.
While many loan products associated with adjustable rates gained a black eye during the great recession, today’s products offer protections against negative amortization and prepayment penalties because of those experiences. Many mortgage products that buyers might think no longer exist, do exist, and offer benefits that should be weighed with an experienced loan advisor.
The difference in the fixed rate payment versus the adjustable rate payment could take two or three years for any higher payment associated with the adjustable rate to deplete the savings in doing so. Typically, there is a ten-year window open with the adjustable rate mortgage that pencils out the loan.
Today’s adjustable rate loans often remain on the lender’s books instead of being converted to government backed loans. This gives opportunity in my opinion to buyers who are ready to benefit from today’s products.
We lend where we live,