Believe it or not the mortgage industry is bringing back the ARM (adjustable rate mortgage). The utilization of this product was a major factor in the foreclosure crisis of 2007. The banks were milking hard working men and women of the equity in their homes by refinancing ARM’s with new ARM’s charging them thousands of dollars every time the homeowner refinanced their mortgage. ARM’s were originally started to help people with lower credit buy a home. Typically after 2 years the mortgage rate would adjust upward and the homeowner would refinance with a fixed rate mortgage. What the mortgage industry began to do was to refinance the mortgage with another ARM charging thousands of dollars in fees and then repeat it in two years. As soon as the values of homes stopped rising and went down, the homeowner holding the ARM was not able to refinance because they did not have the equity in their home.
Monthly Archives: August 2014
First is a Realtor comes into your home and tells you they know the exact price your home will sell for, they are lying to you. If the price seems high and they do not have a clear reason for the price, tell them to pull out there check book and you accept the offer.
First things first. Look for all the homes that have sold in the last 6 months and as close of a proximity to your home as you can find. You need at least 4 homes that can be used as comparables to your property. These properties that you select should be within +/- 15% of the same sq. ft as yours and also with the same amenities as far as bedrooms, bathrooms, basements, lot size and year built.
From this point on determining the asking price for your home is as much of an art as it is a science. I also believe that you should price your home a little bit above what you believe the value of your home. The reason for this is buyers want to feel like they are getting a bargain and .by making the price a little higher you have room to lower your price.