There are millions of Adjustable Rate Mortgages and balloon mortgages that are coming due in the next year or so. Most of my clients are not in that fix. I was always a thirty year fixed or a fifteen year fixed type of guy. I was raised old school in that you pay off the mortgage.
Unfortunately many accountants, stock brokers, and investment people push clients not to pay off their mortgage for tax benefits, and hopefully investments gains. I myself like the security of knowing that my house is paid off and I owe nobody.
Do you know why mortgage people like Adjustable Rate Mortgages besides the low rates for customers? It is not all in the interest of the client. It is in the interest of the bank, or mortgage broker! If you the client gets a 3 year adjustable mortgage then the mortgage person sets himself up for repeat business in 3 years. That means if you do it every 3 years. He could refinance you 10 times and you still would never be paid off!!! Whereas a fixed person is paid off. Sure they paid more in interest but they are paid off. Plus they did not pay closing costs 10 times. 10 X $2000 in closing costs and you still owe money. It is just keeps coming back to the broker. The broker is setting up a retirement plan off of you!!!!
Then there is other problems that come with it. It is happening in Michigan right now. These are things most brokers never told you about. What happens if the value falls and you were close to 80% of the value of your home 3 years ago. Some Home Values in Michigan have plummeted as much as 20% from there highs. The average is 10 -20% in Michigan right now. That means the customer now has to pay PMI, or stay in the adjustable rate mortgage, or sell the house if they can't afford the new payment. Did your broker tell you that! If you want to check your houses value click here. It is not an appraisal but it will give you a general idea of what your house is worth. For more mortgage information, real estate information, Michigan things to do check out my website at http://www.russravary.com/
So the bottom line is that next time you get a mortgage think about the true cost.
Russ Ravary picture
About Me
- Russ Ravary
- I am with Keller Williams and my cell phone number is (313)310-9855. I grew up in Allen Park and spent some time in different states around the country after I turned 18. I have been a Livonia resident for 17 years now. I am widower and just recently lost my wife Marianne to breast cancer survivor after a 21 year battle. She was a great lady. Working hard to get something done is second nature to me. One fellow worker always tells the story of during the refi boom he called the office at 10pm on Sunday night. I answered the phone. We were swamped and I wanted to make sure everything all my clients files were on target to close. I was doing what it took to get them closed. That's the way I was taught. I also believe that you have to give back, to help people... somehow make this world a better place. To treat people and clients good like they treat you and better. I try to help people get the home they want at a good price.
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