mortgage professional?

[Egnalf]

Are you one?

I was reading an article this morning. So called mortgage professional advocating for people who want to buy larger homes who need jumbo mortages to use a jumbo ARM. Sure, just what people should do, take a big note in a rising rate market after fifteen years of historical low rates and now high inflation. How dare he call himself a professional?

[Mike Mercury]

mortgage professional

sounds like there's a kick-back or commission involved.

Just sayin...

[DAB]

It’s good for him, not you. Duh

[ratflinger]

He probably also owns a car dealership

[Mr Hole]

Originally Posted by ratflinger

He probably also owns a car dealership

You left out the word "used".

[Onebadcad]

An ARM, whether jumbo or not, may, or may not, work for some.

I have done mortgages for 33 years, done very, very few ARMs, cannot remember the last one I did which I am certain the borrower requested and was not introduced by me. ARMs are more beneficial during higher rate periods, but I do not like them, as you can explain every detail, emphasize the max rate increases for 12 months, and for life of loan, but the issue is that most will forget this and call you when it happens to complain they did not know.

An ARM works well if you want a mortgage and will accept the risk of rate increases while requiring a lower starting payment. Most ARMs will have a cap of 2% increase per year and 6% in life of mortgage. When you account for the annual increases in HO INS and FLOOD INS and property taxes and association fees, the total of these may be much higher than a P&I increase on an ARM.

BTW, 100% of Home Equity Lines are ARMs, the benefits outweigh the risks for this product.

[Stangkiller]

Originally Posted by Mr Hole

You left out the word "used".

Ehh Mac Haik sells both

[Onebadcad]

Originally Posted by Mike Mercury

sounds like there's a kick-back or commission involved.

Just sayin...

Very rarely does a mortgage company, bank, credit union or mortgage broker offer a par rate, most rates offered are priced to allow a Gain On Sale from the investor due to the note rate exceeds the cost of money at the time the file is closed.

Most ARMs pay very little revenue based on the market rate, you can make more revenue on the market pricing of a fixed-rate product, due to this most ARM borrowers are charged more in fees to hit the revenue desired by the provider. ARM borrowers typically pay more Origination and / or Discount Points vs. a fixed-rate borrower.

[LATB]

[Addie98Stewart]

It's frustrating when someone in the industry gives advice that seems out of touch with the current economic climate. As someone new to this forum but with some experience in the mortgage world, I've seen how important it is for professionals to stay informed and provide sound guidance, especially in Mortgage Broker Liverpool where the market can be dynamic. Suggesting a jumbo ARM right now might not be the wisest move given the rising rates and inflation. It's crucial for mortgage professionals to prioritize their clients' financial well-being over quick fixes.

[Swany00]

the mortgage brokers I met over the years, lived in amazing homes....doin' it right

[Torqaholic]

Got mail from Fannie Mae the other day. The envelope said final notice. No idea if I'm a professional, it's unopened in the trash.

[Vette40th]

I am very fortunate I have the ability to use a VA loan in times like this. If I could co sign for my kid , I would. She has been saving for a year, one more to go, just to put a down payment on a house. And the prices are going up faster than she can save to make a difference.

[Frankie the Fink]

Originally Posted by ratflinger

He probably also owns a car dealership

Also sells solar panels and extended car warranties.
I had an ARM for a while but always cringed when an anticipated rate occurred; it basically puts interest risk on the consumer who gets a discounted initial rate.

Its fine until some exogenous event occurs, say a supply chain crisis caused by the Red Sea attacks on shipping; then demand spikes prices, inflation rockets and your rate does to......which may happen right now.

Its an individual decision based on one's own financial situation with no "one size fits all" answer IMO.

[Don Rickles]

A lot of people, have a lot of money. These are being directed to big dollar buyers that can refi on a whim. For the price of a Rolex lost in closing points, meh big deal.....

[KenHorse]

My wife was an FHA/VA DE (Direct Endorsement) Underwriter for many years. She laughed at those who took out ARMs

She understood why some did but she still laughed

[Yadkin]

I did an ARM on a refi for my first house, took my rate down from about 12 to 8 or so. This was the late 80s and rates were gradually going down. But the ARM went up, so I refi'd again after three years. I saved money but it was not a great feeling.

[GTOguy]

I know several people who lost their homes with ARM loans during the '08-'10 time period. The house I currently own free and clear is one of those. Bought for pennies on the dollar when they got blown out by an unpayable rate hike. I never have, and never would consider the hocus-pocus of an ARM. It's as bad as buying a car on credit.

[LATB]

I’ve done ARM mortgages for spec home construction.

Properly executed it can be a good financial tool. Same with interest only mortgages.
The problem is most borrowers are clueless and are only looking at today’s monthly payment and have no ability to manage it.

[69camfrk]

Originally Posted by Vette40th

I am very fortunate I have the ability to use a VA loan in times like this. If I could co sign for my kid , I would. She has been saving for a year, one more to go, just to put a down payment on a house. And the prices are going up faster than she can save to make a difference.

Home prices have gone ape shit. That 150k house 4 years ago is 400k now. I wanted to move to north Georgia, and even though I would come out well on the house I'm in, it is cost prohibitive. Guess I'll stay put in Shitville...