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Strategic Financing: The Solution to Today's Changing Market
Interpreting one of the main challenges of today's mortgage market isn't as difficult as it might seem. With interest rates on the rise, a lot of consumers are extremely troubled by the negative effects of increasing interest rates on their Adjustable Rate Mortgages. Each month, they are forced to watch hopelessly as their monthly payments increase and interest rates climb closer and closer to the lifetime caps of their loans. For these homeowners who are struggling, refinancing into a 30-year fixed rate mortgage may not help them right now. In fact, doing so could increase their monthly payment and further strain their finances.
So, what's the solution for homeowners who are stuck with an ARM they don't want or can no longer afford? And, what can real estate agents, builders, and other professionals do to move more inventory in today's changing market?
Solution for Homeowners:
One solution to this dilemma is a special tiered-rate mortgage program which was extremely successful back in the much more challenging mortgage market of 1994. This special program has no margin and no index associated with it at all. Let's examine a loan scenario where the prevailing interest rate is 6.75% on a 30-year fixed. For the first year ... more
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