A senior gentleman gave me a call yesterday. For 15 minutes I assessed his situation and told him definitively he should move forward only with an adjustable rate mortgage.
Well, this isn't my first rodeo and know how most seniors feel about adjustable rates. So, my goal is, after I tell them they should get an ARM to explain myself as fast as humanly possible.
Why? Because I know the person is already objecting in their mind. It's already a bad deal. So, I get into why it is a good deal as fast as possible.
Well, this fellow beat me to the punch, which is hard to do when there might have be a millisecond for him to cut me off. When I attempted to explain why he simple grunted gruffly, "FIXED RATE".
Now I'm not exactly the kind of person willing to accept being squelched. I have a voice, my words make sense, and I was going to tell him where the bear makes in the buckwheat. Wrong! He shut me up again.
My would be customer refused to hear what I had to say, as if I was introducing a vampire into his home. Since you can't shut me up, perhaps you can read on and get a feel why the ARM is typically the better choice.
Here is why: The adjustable has a line of credit option and the fixed does not.
Lenders qualify the senior to receive an available sum of cash equal to 50% to 75% of the home's value. Most only need a portion of this money. This makes the ARM and line of credit more viable.
The adjustable rate, unlike the fixed, gives the borrower to pull out money, from the line of credit, as needed and when needed.
What is most notable about this is the interest accrues against the borrower's equity only on money drawn out and used. While it's sitting in the line of credit it's not working against the borrower's equity.
When a borrower goes with the fixed rate he takes out a sum of money, either the entire amount or a portion thereof. And "Ba Dee, Ba Dee, Ba Dee, Thats all folks!"
The guy above owned his home outright and only needed supplemental income. It would be foolish for him to go with the fixed because he'd have to pull out a bunch of money, and put it into an investment or a bank.
It does not compute. The rate charged for money pulled out would be greater than the return from the bank or CD. The best option is to go with the ARM and leave it the line of credit. On top of that the 15 year average interest rate on the ARM is lower than the current fixed rate.
Well, this isn't my first rodeo and know how most seniors feel about adjustable rates. So, my goal is, after I tell them they should get an ARM to explain myself as fast as humanly possible.
Why? Because I know the person is already objecting in their mind. It's already a bad deal. So, I get into why it is a good deal as fast as possible.
Well, this fellow beat me to the punch, which is hard to do when there might have be a millisecond for him to cut me off. When I attempted to explain why he simple grunted gruffly, "FIXED RATE".
Now I'm not exactly the kind of person willing to accept being squelched. I have a voice, my words make sense, and I was going to tell him where the bear makes in the buckwheat. Wrong! He shut me up again.
My would be customer refused to hear what I had to say, as if I was introducing a vampire into his home. Since you can't shut me up, perhaps you can read on and get a feel why the ARM is typically the better choice.
Here is why: The adjustable has a line of credit option and the fixed does not.
Lenders qualify the senior to receive an available sum of cash equal to 50% to 75% of the home's value. Most only need a portion of this money. This makes the ARM and line of credit more viable.
The adjustable rate, unlike the fixed, gives the borrower to pull out money, from the line of credit, as needed and when needed.
What is most notable about this is the interest accrues against the borrower's equity only on money drawn out and used. While it's sitting in the line of credit it's not working against the borrower's equity.
When a borrower goes with the fixed rate he takes out a sum of money, either the entire amount or a portion thereof. And "Ba Dee, Ba Dee, Ba Dee, Thats all folks!"
The guy above owned his home outright and only needed supplemental income. It would be foolish for him to go with the fixed because he'd have to pull out a bunch of money, and put it into an investment or a bank.
It does not compute. The rate charged for money pulled out would be greater than the return from the bank or CD. The best option is to go with the ARM and leave it the line of credit. On top of that the 15 year average interest rate on the ARM is lower than the current fixed rate.
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