Real Estate Blog - In Defense of Adjustable Rate Mortgages (ARMs)

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In Defense of Adjustable Rate Mortgages (ARMs) - Yes, you read that right!

In Defense of Adjustable Rate Mortgages (ARMs)
Yes, you read that right!

A few nights ago I was at a Wine, Women and Wealth meeting. The topic was mortgages and, thanks to my friend and colleague Erin Zasada (Financial Advisor at Wachovia/Wells Fargo) I had center stage.

Wine. Women and Wealth Normally I would be all over the topic and ready and willing to give pointers and help in any way I can, but with the current economic climate, people are filled with worry and doubt.

To my pleasant surprise, the ladies had a mountain of questions, like "How can I pay my mortgage off early?" and the like. It was a great time to re-enforce the positive, dispel the negative, reflect on the what's happening in today's market and, of course, drink some wine ;)

* * * * *

At one point in the evening, the topic changed to Adjustable Rate Mortgages (ARMs, for short). All the ladies, as if on queue, started to complain express their concerns and fears in relation to ARMs. Such is the case when groups of people get together and talk about home loans these days.

But, to my surprise, one of the ladies present at the meeting said, "Ya know, I just have to say one thing. If people don't read their loan documents, it's their own darn fault. I have an ARM, and it's a great loan."

Yikes! My head spun around so fast I got dizzy! Who is this speaking? Who would dare insert dissension amongst the ranks?

She continued to explain why she liked her loan - for one, her rate is now LOWER than it was at the time she took out her loan. Noticing the opportunity to educate my fellow club members, I gave a brief tutorial on ARMs (but only after making a note to myself to check my loan documents when I got home - more on that later!)

* * For a brief tutorial on ARMs, CLICK HERE! * *

Remember my friend? After our Wine, Women and Wealth meeting, I went home and looked at my loan documents.

If my rate were due to adjust today......drum roll please......my rate would go DOWN!!!

LIBOR today = 2.12%

My Margin established at the origination of my loan = 2.25%

My new rate would be:
2.12 + 2.25 = 4.370%

Who says mortgages and wine don't mix?!?!?!

Maryellen Garasky
Mortgage Broker
KMG Mortgage Group
(208) 664-3600
(509) 638-3455
www.kmgmortgagegroup.com

Posted by Kevin & Maryellen Garasky (KMG Mortgage Group - ID & WA) on 03/02/2009 07:45 PM

Comments (7)

Adjustable Rate Mortgages in the Mortgage / Finance Channel

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7 Comments on In Defense of Adjustable Rate Mortgages (ARMs) - Yes, you read that right!

MAR

Maryellen, I swear, you HAVE ALL THE FUN! If I could ever track you down in person, I know we would have some good times!

Maryellen - I have to agree with the lone dissenter. Yeah, I know, I should be discouraging people from getting ARM's and although they are not for everyone, they are good loans for some people.

MAR

This is one of those posts that reminds people that sometimes it makes sense to swim upstream.

Janna - I do have a lot of fun. Life is too short!!! There will be another WWW meeting, one week from today. I know you choose not to partake - and don't feel obligated, there are a few ladies who don't partake when they come. I would love for you to be my guest!!!!

Donne- They do make good loans for the right people. But, with pricing being so aggressive these days, it's hard to justify an ARM when 30-year fixed is so darn good!!! BTW, loved, loved, loved your hijacked post the other day. Funny!!!

Kate - Yes, it sure does - when the time is right. Thanks for stopping by and I hope to see you again!

MAR

Maryellen, just let me know when and where, and if my social networking calendar has an opening, I'll be there! And just so you know, I DO partake in FUN, all the time! Because of my goal to lose 100 pounds this year, I don't partake in much else...

Janna - GREAT news!!! Tuesday, March 10th at 5:30 p.m. at the Wine Cellar downtown Cd'A. We usually take about a hour to talk about the subject matter (this week is VERY timely: "Reading the Financial News") and then a few of us stay afterward just to catch up. Hopefully I'll see you there!

Maryellen - OH,I want to come and hang out with a bunch of great women and drink great wine. How far is Cd'A from SoCA? LOL

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