Last week, real estate mortgage interests rates pulled back a little, giving homeowners a chance to refinance out of those risky adjustable rate mortgages. I always say that the only people those option arms are good for, are people that don’t need the money. When you can cover the note, there is no risk in taking a riskier loan. Its not life or death for people with money. They just shift an asset to cover the debt. But for home owners on a tight budget, taking a high risk loan can lead to disaster. If the mortgage ticks up just a little, it can put the home owner is serious peril. In the end there is no substitute for buying within your means. I am not saying that everyone needs a 30 year fixed home loan. Quite the contrary. What I am talking about is going with a home loan based on your income growth, time line for occupying the home, and budget. For most people a 5 to 10 year fixed mortgage is adequate. And if you cant afford a traditional amortized note, then interest only options are fine especially for the first 5 years when your pay down would be very little anyway. You can always pay more if you have it and the extra payment will go to pay down the principle on the loan.

So once again. If you have an adjustable rate mortgage or option Arm, don’t let it go neg. am on you. Lets refi it now while you have the opportunity. I am sure that you will not want it to eat into your hard earned home equity. Call me to get connected with my preferred lenders. They have terrific rates and will not put you in a high risk loan.

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