Get rid of your adjustable rate mortgage and pay off early while there is still time
Posted on September 9, 2007
Filed Under Home Finances |
They have been on the A.M. radio every weekend for years. It used to be “get an interest-only or variable rate mortgage now - no income verification needed. Bad credit or bankruptcy OK”. Getting those mortgage quotes was easy for anyone. I was wary then, and rightly so. (continued…)
Now it has played out without great surprise. Many of those loans have gone into default. What is surprising is that the lenders who made those loans are acting surprised. And just as surprising is that the same guys I used to listen to on the radio while working in my shop are now offering to help those unfortunate people with adjustable rate mortgages refinance with a conventional mortgage loan. Surprise, surprise, surprise!
Well, at least they are right this time. An adjustable rate mortgage can go south at a very inconvenient time - or north actually. My personal opinion is to go with a convention P&I mortgage whenever possible; 20 years whenever possible - or, you can make an extra principal payment once a year, or pay bi-weekly through your lender’s accelerator program.
You can easily get a free mortgage quote on a conventional mortgage and get rid of the surprise factor of an adjustable. Life is uncertain enough; who needs another surprise?!
Regards,
Stephen Dunbar
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