Don’t make the same mistake twice.
Financial advisers say be careful when it comes to buying a home.
Interest rates are at a historic low, but don’t be fooled and make the same mistake people made before the housing market crash in 2008 with adjustable rate mortgages.
ALTOGETHER.FINANCIAL ADVISERS SAY AVOIDCERTAIN LOANS WHEN IT COMES TOBUYING A HOME.INTEREST RATES ARE AT A HISTORICLOWBUT DON’T BE FOOLED AND MAKETHE SAME MISTAKE PEOPLE MADEBEFORE THE HOUSING MARKET CRASHIN 2008.FOUR IN YOUR CORNER’S RACHELLOYD SHARES WHAT TO WATCH OUTFOR BEFORE MAKING THAT PURCHASE.:21 - :261:00 - 1:05(PKG)DESPITE BUSINESSES SLOWING DOWNOR EVEN CLOSING DUE TO COVID-19THAT’S NOT THE CASE FOR REALESTATE.
REALTOR KARI WILBANKS,WITH COOPERATIVE REAL ESTATESAYS BUSINESS IS BOOMING THESEDAYS.FIXED RATE MORTGAGES ARE ALITTLE OVER THREE PERCENT ANADJUSTABLE RATE MORTGAGES ORA-R-M’s ARE CURRENTLY TWO POINTSEVEN FIVE PERCENT.Back in 2005 and 2006 ARM loanswere extremely prevalent amongfirst time home buyers as wellas people that were obviouslylooking to move upNOT SO MUCH ANYMORE.
WILBANKSSAYS PEOPLE RARELY GET A-R-M’NOW SINCE THE RATE ISN’T LOCKEDIN FOR THE DURATION OF THE LOAN.What people didn’t see comiwas that instead of going downdown down, they started to goup, up, up.SHE SAYS STAY FAR AWAY FROM A-R-M’S.
BANKS PROFIT ON THAT UP,UP, UP TREND.
TOM SMYTHE,FINANCE PROFESSOR AT FLORIDAGULF COAST UNIVERSITY SAYS THELOW RATES LURED PEOPLEAND THENLEFT THEM DROWNING IN 20082009.they call it a teaser becauseyour initial rate or yourpayments are lower than what iwould be on a thirty year.
Butthen they have the potential torise going forward.WILBANKS SAYS BETTER SAFE THANSORRYGO WITH THE FIXED RATE.Actual fixed rate loans are solow, most people are choosing tolock into a 20-30 year fixedmortgage rate, so there isn’tthat uncertainty.(LLTAG)WILBANKS AND SMYTHE SAY THE ONLYTIME ADJUSTABLE RATE MORTGAGESARE DESIRABLE IS IF YOU’RE ANINVESTOR AND YOU’RE PLANNINGHAVE THE LOAN FOR A SHORT PERIODOF TIME.
BUT RIGHT NOW THEY’RESTILL NOT A GOOD IDEA.
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