"FIXED RATE VS. ADJUSTABLE RATE"
With fixed rates as low as they are, you would think this decision is a no brainer, not so fast. Sometimes an adjustable rate is the best answer. This is an example of clients that were shocked by my question to them, of why do you want a fixed rate. They looked at me like I was crazy, as an adjustable rate had never occurred to them.
They really hadn't planned on buying, as they were planning on moving back to New York. They had been renting the home for the last two years, paying $2,500 a month. The owners of the home had told them, they weren't planning on putting the home on the market for at least 5 years, but their plans changed. The buyers have a special needs child that is in school in Pomfret, CT, so moving out of the area was not an option, plus they really loved the home and didn't want to move.
Even though the monthly payment was not a concern, the down payment was. The purchase was going to be $330,000 and they had had $20,000 to work with. We did an FHA loan for them. The down payment was $11,550, the closing costs, including escrows were $7,200. The best part, their monthly payment actually went down, now under $2,300. They are saving about $300 per month, because they chose an adjustable rate vs. a fixed rate. $10,000 of the next 3 years and get a boat load of tax benefits. There has never been a better time to own a home.
In the last 20 years I had refinanced this home 3 times, for the previous owners, who now live in Naples, FL. They referred me to these very happy new homeowners.
Joe Petrowsky, NMLS #6869
Right Trac Financial Group, Inc. NMLS #2709
110 Main St.
Manchester, Ct. 06042
Office: 860 647-7701 x116
Fax: 860 647-8940
Cell: 860 836-9294
Joe Petrowsky does not guarantee nor is in any way responsible for the accuracy of the information provided herein, and provides said information without warranties of any kind, either expressed or implied.
Equal Housing Statement: We are pledged to the letter and spirit of U.S. policy for the achievement of equal housing opportunity throughout the Nation. We encourage and support an affirmative advertising and marketing program in which there are no barriers to obtaining housing becuase of race, color, religion, sex, handicap, familial status, or national origin.