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| FREQUENTLY ASKED QUESTIONS |
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| Why is an ARM better than a 30 year fixed mortgage? |
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| It is better because most homeowners today only stay in their home or refinance approximately 5 years. The savings between the 30 year fixed loan and the opportunity mortgages is too signifigant to simply let it go back to the bank. |
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| Do these types of loans cost more? |
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| No, the opportunity loans are a part of the same lending products of most large lenders and as such the costs are the same as any normal purchase or refinance home loan. |
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| How high can the adjustable rate go? |
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| By law all adjustable rate loans must have a maximum life cap. Most life caps are around 9.95%. |
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| Why have I not heard of these types of loans? |
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| These loans have been around for over a decade, but have only been being utilized by the wealthy. Now most of the top lenders in the country offer these loans and more will follow because consumers want more control of their money. |
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| What happens after the initial ARM period? |
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| Depending on the "opportunity mortgage" of choice, the loan will make periodic adjustments in conjuction with the index and borrowing terms of the Lender.
Remember, Lenders are not in the business of owning homes, because they are by nature conservative They do not lend money on homes utilizing risky terms. |
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| Wouldn't I lose out if I had just kept my 30 year fixed mortgage? |
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| If you take the savings from the old mortgage payment to the new mortgage payment, most howeowners will be better off just putting the new savings under their pillow. If the money is put toward reducing high interest debt or in safe modest returning investments, you will have a very difficult time trying to catch up with the principal of compound interest. |
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| What is the downside? |
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| The downside is taking the savings from the new "opportunity mortgage" and spending it on depreciating items.
Then again, if you were going to buy those unnecessary items regardless of the new mortgage, then at least you avoid the high interest rate of a credit card or other costly consumer financing options. |
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