The Adjustable Rate Mortgage Is The New Phenomenon For Mortgage Brokers And Mortgage Companies Alike

Category: Finance, Mortgages.

The adjustable rate mortgage is the new phenomenon for mortgage brokers and mortgage companies alike.

I bet that 90% of the mortgage brokers that call you were the ones putting their clients into these types of mortgages, hence the reason for them calling you and not the clients they worked with in the past. They know that your rate is going to go up and that you will need to refinance your home loan before too long, so here they come to swoop in and be the hero. Unfortunately schools in America do not have a standard finance class to educate our citizens about home ownership, credit cards and other financial obligations we take on as we grow. For instance, a few years ago the media and other top ranking officials in the mortgage industry were telling everybody to take an adjustable rate mortgage, but why? This not only allows for us to be taken advantage of but also allows so called professionals to be taken advantage of by the companies they work for. If you asked them back then I bet they would say because rates are low.

On a$ 200, an adjustable rate, 000 mortgage of 75% and a fixed rate mortgage at 75% amortized over 30 years have a payment difference of$ 136 a month. The truth is, typically fixed rate mortgages have a higher interest rate compared to ARM's, usually half a point to a point on your interest rate. My guess is, if your debt to income ratio is to high on the fixed rate mortgage but you qualify for the adjustable rate mortgage you are looking at a home that is over your budget. You need to start seeking options way before your rate is going to adjust. Now that you find yourself stuck in this dilemma, finding a way out is not as impossible as you think. The most common problem I see today has to deal more with credit issues rather than lack of equity. If you start looking around for a new mortgage early enough you will be able to determine which mortgage broker really cares about you and which mortgage broker cares only about themselves.

A true mortgage professional is not going to discard you just because you do not qualify for a loan today, he or she is going to work with you to solve your problem 3 months, 6 months or even 9 months in advance to prepare you for a new loan before your mortgage rate adjust. Do yourself a favor and start looking into what possibilities are available to you today so when the time comes for your adjustable rate mortgage to adjust you are prepared.