| Author |
Message
|
| trixiezzz |
 Posted: Thu Mar 17, 2005 5:32 pm Post subject: What do you think of ARMs? |
 |
|
Investing Manager
|
That's Adjustable Rate Mortgages, that is....
Adjustable rate mortgages: An adjustable rate mortgage (often called an "ARM") offers a fixed initial interest rate and a fixed initial monthly payment. After the initial period is over, the rate and term of the mortgage can be modified at predetermined times under the agreement to reflect the current market mortgage rates. |
|
| Back to top |
|
 |
| noksagt |
| Posted: Fri Mar 18, 2005 6:08 pm Post subject: |
|
|
Member of the Month! March
|
| They were great many months ago--rates were low on them & dropping. But obviously they're not good if your rates would start going up! |
|
| Back to top |
|
|
| docstrange |
| Posted: Fri May 06, 2005 10:49 am Post subject: Arm |
|
|
New Poster
|
If you are only planning to live for a short time in your home or use it as an Investment tool, it is great.
You have 4 options of payments.
Even if you were to pay the very minimum payment, your Equity in your home still increases.
If you live in a state like California, were land almost increase by 15%.
Do the Math.
luisgtorres at paris com |
|
| Back to top |
|
|
| freeye |
| Posted: Mon May 23, 2005 11:26 am Post subject: |
|
|
Investing Manager
|
|
| Back to top |
|
|
| Colli |
| Posted: Sun Nov 18, 2007 3:56 am Post subject: |
|
|
Investing Sr. Associate
Joined: 18 Nov 2007
Posts: 57
This Month: 0
126.68 e$
Net worth: 12,171.18
Portfolio Value: 12,044.50
Monthly Return: -13.67%
Trades this month: 0
Churn Rate: 0.00%Items
|
| Well, it appears that recent history has answered this question better than anyone could have imagined. ARM's have been misused and abused too long and we are seeing the results of that now! |
|
| Back to top |
|
|
| dozer3060 |
| Posted: Mon Jan 21, 2008 2:28 pm Post subject: |
|
|
Investing Associate
Joined: 21 Nov 2007
Posts: 15
This Month: 0
2528.64 e$
Net worth: 6,970.00
Portfolio Value: 3,591.36
Monthly Return: -18.24%
Trades this month: 0
Churn Rate: 0.00%Items
  |
ARM's are only right for about 5% of the population who are looking to flip houses just watch out for the negative amortizations and interest only loans they are very dangerous for people who don’t know much about them.
By the way they were also very popular right before the Great Depression amazing how history repeats itself. |
|
| Back to top |
|
|
| deprived |
| Posted: Tue Jan 22, 2008 7:49 am Post subject: |
|
|
Investing Sr. Associate
|
Many people do realize that they can place a cap on ARMS. Which means if set it to rises 1/4 of a point per year up to a max amount. Many people also
forget to change their mortgages over to a fixed rate. |
|
| Back to top |
|
|
| Slim_80 |
| Posted: Tue Jan 22, 2008 12:28 pm Post subject: |
|
|
Investing Sr. Associate
|
| I never knew so many people recently that have ARM's, probably because they are freaking out about them. Also these people did not fully understand what an ARM was and are angry at knowing the risks now. I find that hard to believe because I have bought two houses now and was given the whole explanation of the difference between a fixed and an ARM and most bankers say that they do not recommend an ARM unless you are interested in looking into one. I blame it partially on the bankers on making a deal. |
|
| Back to top |
|
|
| spencer |
| Posted: Fri May 23, 2008 3:37 am Post subject: |
|
|
Investing Associate
Joined: 09 May 2008
Posts: 20
This Month: 0
9542.89 e$
Net worth: 9,542.89
Portfolio Value: 0.00
Monthly Return: 0.00%
Trades this month: 0
Churn Rate: 0.00%Items
|
| It looks like the interest rate swill only be rising from here (they need to rise a lot to stop the dollar from falling), which means that getting a fixed rate loan will be a better choice. |
|
| Back to top |
|
|
| efflandt |
| Posted: Fri May 23, 2008 4:06 pm Post subject: |
|
|
Investing Manager
|
I have always had a fixed rate. However, when I refi'd in early 2005 at lower fixed rate for shorter terms, they gave me a free HELOC to borrow back paid principal at prime minus 0.5%. That variable rate went as high as 7.5%, but is currently 4.5% (lower than my fixed rate).
So it is almost tempting to pay down my mortgage principal with the HELOC, but there is no telling when interest rates will inch back up.
I have never seen the terms of an ARM. Do their rates still go up even though interest rates are again near an all time low? |
|
| Back to top |
|
|
|
|
 |
| Do5 |
| Posted: Tue Jul 15, 2008 11:51 am Post subject: |
|
|
Investing Sr. Associate
|
| Good for certain product situations, but I agree that they were misused and abused. |
|
| Back to top |
|
|
| tallmyfox |
| Posted: Tue Aug 12, 2008 6:42 am Post subject: |
|
|
Investing Associate
Joined: 12 Aug 2008
Posts: 12
This Month: 0
Location: ky
7642.91 e$
Net worth: 7,642.91
Portfolio Value: 0.00
Monthly Return: 0.00%
Trades this month: 0
Churn Rate: 0.00%Items
|
| ARMs are good for those of you that have the ability to pay of before maturity. The rest may find it very tempting at moment but when the times get tough the banker will not be there to get you out of your own mess only out of your own home. Stick with fixed finace because most people can't predict where their finacial status will be in 5 years and security is always better in the long term.. |
|
| Back to top |
|
|
| eamoses |
| Posted: Tue Aug 12, 2008 7:21 am Post subject: |
|
|
Investing Sr. Associate
|
| from what i understand the variable rate is really up to the company, if rates go up then expect to see a huge jump, while if rates go down, i would expect them to only go down a little. ARM's are really designed for house flippers and not for homebuyers... |
|
| Back to top |
|
|
| DKnightSr |
| Posted: Tue Aug 12, 2008 10:17 am Post subject: |
|
|
Member of the Month
May
|
| Slim_80 wrote: | | I never knew so many people recently that have ARM's, probably because they are freaking out about them. Also these people did not fully understand what an ARM was and are angry at knowing the risks now. I find that hard to believe because I have bought two houses now and was given the whole explanation of the difference between a fixed and an ARM and most bankers say that they do not recommend an ARM unless you are interested in looking into one. I blame it partially on the bankers on making a deal. |
Sir, I respectfully disagree with your statement on the bankers. As you say, bankers explain the differences between the loans. I've bought 8 houses now, and each time ARM's were discussed. That's the banker's job, to give you all your options. HOWEVER....
It is also his job to get you to take a loan from HIS company as opposed to the competition. That's how he feeds his family. If you're "hot to trot" on ARM, and are going "cold to frigid" on a fixed rate, he has no option but to enable the ARM.
Too many people these days want to blame others for their mistakes. Lets take smokers. I'm one. When I get cancer (notice I typed WHEN not IF) it is MY problem! I expect MY insurance company who has collected a great deal of money over the last 35 plus years, to step up and help me stay out of pain until I'm done.
BUT....you can bet your backside that I'm not going to be calling the newspapers asking for assistance in prosecuting tobacco companies....or even writing here to warn you of the dangers.
Bottom line, the information is out there. If we make life choices on ignorance or just plain poor decisions....that's on us!
I teach a senior group now and then....and one of the things I teach (as they are all leaders in their own right) is...
Life is full of choices, choices have consequences. Only when we are prepared to accept the consequence are we entitled to the choice. If we ARE prepared to accept the consequence, then we MUST make the choice.
Thus...for bank loans....only one person (or couple) signed the commitment. I doubt there were many (if any) forgeries.
The greatest school of learning is the school of hard knocks. I am a graduate of many of its' courses, and will probably continue to be a student. But the very best lessons I've learned....were in my Alma Mater...
"Whatsa Matta U"  (Which is what I ask myself each time I realize I have just passed ANOTHER hard knocks semester)
We have a mess in the mortgage area. ALOT of people made bad choices, both customers and providers. Now we live with it, work through it, and go on...sadder but wiser.
I bet each and every one of them teach THEIR children basic finance though...eh? 
EDIT: Whew, got pretty high up on the soap box didn't I?  Sorry 'bout that guys. D |
|
| Back to top |
|
|
| tallmyfox |
| Posted: Tue Aug 12, 2008 2:26 pm Post subject: |
|
|
Investing Associate
Joined: 12 Aug 2008
Posts: 12
This Month: 0
Location: ky
7642.91 e$
Net worth: 7,642.91
Portfolio Value: 0.00
Monthly Return: 0.00%
Trades this month: 0
Churn Rate: 0.00%Items
|
| That's right no one can help you if you trap yourself in an ARM you can't afford. So just stick to safety and go with a fix rate for long term use. Unless you know for a fact that you can pay it off quick or refinance it later for a fixed rate then you should be fine with an ARM loan. It doesn't matter how many house's you buy if you can't afford the payment you should always go with what is logical. The banker will give you a nice rate now but he knows later the market my rise then he will be happy. It's not the banker's fault that he used his logic to better his life. |
|
| Back to top |
|
|
|
|
stock market game on the web. At eInvesting you compete for monthly cash prizes while you interact, make virtual dollars, purchase items, and trade in the realistic stock market simulator. We make investing FUN!
