Hello Friends, Interest rates are beginning to rise slightly and are current ly back to their worst levels of the year, last touched on in May. By the time you get this update, the Federal Reserve will have likely increased their target interest rate, the Fed Funds, another .25% with one more likely increase to happen at the December meeting. Since we are still in an increasing rate environment, I want to take this moment to refresh you all on products in the market that are alter nates to fixedrate products, such as ARMs and Balloon mortgages. When rates start to rise, alternate lending products can help some borrowers bridge the gap until the next rate drop happens, which will happen eventually.
Mortgage Loan Products/ARMs — Adjustable Rate Mortgages, ARMs, are typically mortgages where the monthly payments amortize over 30 years, but the interest rate is not fixed over that entire 30year term. These loans usually have a fixed interest rate for an introductory period of 1, 3, 5, 7, or 10 years. The interest rate during the introductory period
Mortgage Loan Products/Balloons — Balloon mortgages are similar to Adjustable Rate Mortgages, ARMs, in that the interest rate is fixed for an introductory period of 1, 3, 5, 7, or 10 years and may offer a lower starting rate than a comparable 30year fixed mortgage. The difference between a Balloon and an ARM is that after the introductory fixedrate period, the Balloon loan will require the borrower to pay off the loan in full, either by paying off the remaining principal balance using the borrower’s existing funds, refinancing the loan to pay off the Balloon loan, or selling the property to pay off the Balloon loan. Balloon loans can be helpful to investors or home owners who know they will keep the property for a limited period of time or who are savvy enough to be able to play market fluctuations to their benefit. These products can be complicated to understand and require spending some time with me on the phone or in person to fully understand whether or not these options are the best ones for your partic u lar situation.
On a different note, the new website is finally live! Please feel free to check it out and let me know if you have any questions, comments, or feel like leaving reviews for me. I am trying to get with the times and finally have a Yelp page. To leave a review for me, go to “About Vic” in the top navigation and then click on “Reviews.” This link will take you to a page that allows you to write a review for me on Google , Facebook , and Yelp . Thanks in advance to all of you who continue to support the work I do.