Say you’ve got a son or daughter who just got married and the happy couple comes over to tell you the great news about their new house search. They explain that they have a great real estate broker who has recommended a particular loan broker to help with some great financing. They met with the loan broker who then gave them some great news.
The loan broker could get them ARM financing (an ACTUAL Rate Mortgage) for 2 points under the current standard rate and that rate would be the Actual Rate rate for the life of the Mortgage. It’s ARM financing. Your kids are really excited about this. After all, if they don’t get the ARM mortgage, they’ll have to get a FIXED Rate Mortgage and face changing and rising interest rates all the time because the interest rate on this sort of loan would change by a FIXED amount higher than the current standard interest rate.
What would you tell them?
(image courtest of TonyWatson.net)
