I have some concerns regarding loans and what to expect when helping first time home buyers (or anyone for that matter) get into a home. I have noticed flyers in my mailbox and advertisements on the Internet about being able to still find a sub-prime loan. This worries me a little.
Let’s face it, house prices are unreasonably high in a lot of the urban and cosmopolitan areas in the US right now. Most people want more home than they can qualify for. So it’s understandable that people believe a lender when they tell us about a great program with zero down and small monthly payments. Consumers are becoming more educated, and a lot of real estate agents are familiarizing themselves to help the first time home buyer make a good, well-informed decision. That's the good news!
I found this article and I am flabbergasted at how easy it is to get into trouble with an ARM. This could potentially ruin someones credit (or worse). Life is as unpredictable as the Real Estate Market so be careful. Do all that you can to educate yourself and/or your clients before deciding to go with a risky loan.
I tell all the buyers that I meet to make sure and get a good referral from a trusted source before choosing a lender. Please don't settle for the cheapest rate! I know a couple great ones. I'm always sure to tell my clients that they can use whomever they are most comfortable with, but I have done my research and it's one of the most important decisions they will ever make! You can never be too safe.
Here's a link to a USA Today column regarding ARM's and stories of how they made some consumers lives fall apart:
http://www.usatoday.com/money/perfi/housing/2006-04-03-arms-cover-usat_x.htm
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