| Sunday, September 24, 2006 |
| ARM harm |
The NYTimes recent article: It Seemed Like a Good Bet at the Time ... (you can get a free password at BugMeNot.com) reports that more people are getting squeezed by rising adjudstable rate mortgages (ARM). One such owner, who requested anonymity rather than risk the embarrassment of exposing a financial blunder, bought a house in Port St. Lucie, Fla., as an investment in April of last year and financed the $410,000 purchase with an ARM, with an introductory rate of nearly 7 percent. The loan was an afterthought, since he expected to sell the house almost immediately for a profit. He didn’t, and now the developer recently sold a similar house in the neighborhood for $325,000.
“I just didn’t know what I was doing, and I shouldn’t have done it,” said the man, who does not have enough equity in the house to refinance and who will run out of money to pay the mortgage in 10 months. “Maybe the Lord will send a miracle.” |
| posted by Boston Gal @ 7:26 PM *
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| 2 Comments: |
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I always thought ARM loans to be stupid. I loved the quote from the couple who supposedly played the ARM game and won... But the $4,500 the couple spent on the refinancing probably erased most of the interest-rate savings from the ARM, she said. The only people who benefit from ARMs are flippers and serial home swappers. The majority of home owners simply got screwed!
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Those stories are unsettling. I think if the buyer has a solid plan that isn't just "I want to buy more house than I can afford mentality," ARMs can be beneficial.
I have a 5 yr ARM around 5%. My daughter leaves for college in 4 years. I hate this place. When she leaves, I'm outta here!
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I always thought ARM loans to be stupid. I loved the quote from the couple who supposedly played the ARM game and won... But the $4,500 the couple spent on the refinancing probably erased most of the interest-rate savings from the ARM, she said. The only people who benefit from ARMs are flippers and serial home swappers. The majority of home owners simply got screwed!