Greenspan Says ARMs Might Be a Better Deal
Greenspan says ARMs might be better deal.
That was the title of an article in USA Today earlier this year. Greenspan refers to Federal Reserve Chairman Alan Greenspan. I promised you a synopsis of that article, and here it is. Sorry it took a few days, but I wanted to make sure and hit all of the relevant points. If you want to read the entire article, you can either go to USA Today online (if you're a paying member) and look under "Advanced Search" for Alan Greenspan for the date 2004-02-23 and it will pull it up for you. Or, you can go to the site http://top10lists.freewebpage.org and find a reprint of the article.
Basically, Mr. Greenspan was saying that people could save thousands of dollars by choosing adjustable rate mortgages (ARMs) and that banks and credit unions don't usually give them many options to do so. "Federal Reserve Chairman Alan Greenspan said Monday that Americans' preference for long-term, fixed rate mortgages means many are paying more than necessary for their homes and suggested consumers would benefit if lenders offered more alternatives."
Greenspan was making a standing room only speech to the Credit Union National Association meeting in Washington when he made these comments. "Overall, the household sector seems to be in good shape," Greenspan said. "While borrowers can refinance fixed rate mortgages (which made up more than 70% of the mortgages drawn in January), Greenspan said homeowners were paying as much as 0.5 to 1.2 percentage points for that right and the protection against a potential rise...". He suggested "A Fed study suggested many homeowners could have saved tens of thousands of dollars in the last decade if they had ARMs."
Now there are lots of innovative programs out there, but Greenspan was talking to Credit Union officers about banks and credit unions, which usually don't have or promote these kinds of home mortgage loans. Too find a program that is an ARM and is designed for someone with low income or with bad (or no) credit, you have to consider using a Licensed Mortgage Broker. They have access to a wide variety of programs through many different lenders, not all of whom are as strict as banks and credit unions about credit scores and income restrictions.
Further illustrating Greenspan's point, the Mortgage Bankers Association said the average rate at the time for a 30 year fixed mortgage was over 2 percent higher than for a 1 year ARM. And the fact is, the difference between what your bank or credit union might charge you for a 30 year fixed mortgage , might differ by 2-3% or more from the rate you could get on a 3 year ARM from a mortgage broker! Speaking about banks and credit unions, Greenspan said "American consumers might benefit if lenders provided greater mortgage product alternatives to the traditional fixed-rate mortgage."
Luckily, some lenders do provide alternatives to the traditional products that your bank or credit union might offer. Contact a reputable Licensed Mortgage Broker and they'll be able to find a program that suits your needs. But who do you trust to find you the perfect mortgage to fit your needs? I've researched this quite a bit, and I do have a company I can suggest. They can help you find a loan in almost any state, although they specialize in the State of Florida, where they're located. So no matter where you live or what your situation is, (and especially if you live in Florida) give them a call or contact them by e-mail before you buy a home or re-finance your current mortgage. They're called Star Mortgage, Inc., and their web site is www.starmortgagebroker.com . Check out their site and then contact them, they'll help you get into your new home, or help you start saving money by re-financing your old mortgage.
My next post will be an article on why loan calculators mortgage calculator might give you an accurate, but misleading result, and how to get the best estimate of what your actual mortgage cost might be. The best way to do that if you live in Florida, is to contact Star Mortgage/Crow Processing. You can call them direct at 813-882-8878. They'll look at all the options and give you a free professional estimate of your actual total costs. In fact, in a few days I'll post another Top 10 List (which you can read right now at http://top10lists.freewebpage.org )that lists the top 10 reasons to pick Star Mortgage as your broker.
Mr. Mortgage
That was the title of an article in USA Today earlier this year. Greenspan refers to Federal Reserve Chairman Alan Greenspan. I promised you a synopsis of that article, and here it is. Sorry it took a few days, but I wanted to make sure and hit all of the relevant points. If you want to read the entire article, you can either go to USA Today online (if you're a paying member) and look under "Advanced Search" for Alan Greenspan for the date 2004-02-23 and it will pull it up for you. Or, you can go to the site http://top10lists.freewebpage.org and find a reprint of the article.
Basically, Mr. Greenspan was saying that people could save thousands of dollars by choosing adjustable rate mortgages (ARMs) and that banks and credit unions don't usually give them many options to do so. "Federal Reserve Chairman Alan Greenspan said Monday that Americans' preference for long-term, fixed rate mortgages means many are paying more than necessary for their homes and suggested consumers would benefit if lenders offered more alternatives."
Greenspan was making a standing room only speech to the Credit Union National Association meeting in Washington when he made these comments. "Overall, the household sector seems to be in good shape," Greenspan said. "While borrowers can refinance fixed rate mortgages (which made up more than 70% of the mortgages drawn in January), Greenspan said homeowners were paying as much as 0.5 to 1.2 percentage points for that right and the protection against a potential rise...". He suggested "A Fed study suggested many homeowners could have saved tens of thousands of dollars in the last decade if they had ARMs."
Now there are lots of innovative programs out there, but Greenspan was talking to Credit Union officers about banks and credit unions, which usually don't have or promote these kinds of home mortgage loans. Too find a program that is an ARM and is designed for someone with low income or with bad (or no) credit, you have to consider using a Licensed Mortgage Broker. They have access to a wide variety of programs through many different lenders, not all of whom are as strict as banks and credit unions about credit scores and income restrictions.
Further illustrating Greenspan's point, the Mortgage Bankers Association said the average rate at the time for a 30 year fixed mortgage was over 2 percent higher than for a 1 year ARM. And the fact is, the difference between what your bank or credit union might charge you for a 30 year fixed mortgage , might differ by 2-3% or more from the rate you could get on a 3 year ARM from a mortgage broker! Speaking about banks and credit unions, Greenspan said "American consumers might benefit if lenders provided greater mortgage product alternatives to the traditional fixed-rate mortgage."
Luckily, some lenders do provide alternatives to the traditional products that your bank or credit union might offer. Contact a reputable Licensed Mortgage Broker and they'll be able to find a program that suits your needs. But who do you trust to find you the perfect mortgage to fit your needs? I've researched this quite a bit, and I do have a company I can suggest. They can help you find a loan in almost any state, although they specialize in the State of Florida, where they're located. So no matter where you live or what your situation is, (and especially if you live in Florida) give them a call or contact them by e-mail before you buy a home or re-finance your current mortgage. They're called Star Mortgage, Inc., and their web site is www.starmortgagebroker.com . Check out their site and then contact them, they'll help you get into your new home, or help you start saving money by re-financing your old mortgage.
My next post will be an article on why loan calculators mortgage calculator might give you an accurate, but misleading result, and how to get the best estimate of what your actual mortgage cost might be. The best way to do that if you live in Florida, is to contact Star Mortgage/Crow Processing. You can call them direct at 813-882-8878. They'll look at all the options and give you a free professional estimate of your actual total costs. In fact, in a few days I'll post another Top 10 List (which you can read right now at http://top10lists.freewebpage.org )that lists the top 10 reasons to pick Star Mortgage as your broker.
Mr. Mortgage
posted by Jack @ Thursday, April 21, 2005
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