Month: February 2009

Take Advantage of HUD Home Foreclosures

You don t have to be very up to beat on the news to know that home loan foreclosures are happening in record numbers all over the country. However, it s not just well to do people who are being foreclosed on. The poor and destitute are also losing their homes; even the homes that are provided to them by the government. That s right. HUD, the department of the government that helps to provide housing to low income families is foreclosing on many families because they can t even pay the minimum required amount that helps them keep a roof over their head. If you re looking for a home and you don t have a lot of money, this may be a thing to look into. You could move into one of these HUD home foreclosure homes, fix it up and you could have yourself a very nice home for less than you would have paid normally for a new home.

Nice Homes

When you hear about a HUD home foreclosure, because the nature of HUD, you might automatically picture a run down home. That s not the case for many of these HUD home foreclosures. Many of these homes are nice and some are even newly built. It doesn t seem fair sometimes that these families who don t have much money can move into these nice homes and they pay less than half of what a normal home owner would pay, but that s most often the case. These new homes are provided to these families and the government foots most of the bill. But when these HUD home foreclosures happen, these nice homes are left empty and that s when you should swoop in and snatch them up.

Contact HUD

Unless you know first hand about a HUD home foreclosure in your area, you can contact HUD directly and ask them if there are any foreclosures near you or in a neighborhood where you d like to live. Then you may either have to make an offer, or there may be a bidding war over what the house should sell for. There are oftentimes many offers to HUD over these homes so you should strike as early as possible and with an offer that will likely net you that house.

Realize that HUD would rather put someone in that house and sell it rather than have it left empty. So if you see a sign go up indicating that the house is a HUD home foreclosure, that s your time to strike so you can get one of these nice homes for very, very cheap.

The Pros and Cons of the Adjustable Rate Mortgage

When you are in the market for a new home, one of the most complicated aspects of the purchase may be choosing a financing vehicle for your property. Mortgage loans have become quite diverse in recent years in an attempt to accommodate every financial need and housing purchase. One loan package that has become rather popular is the adjustable rate mortgage. These loans generally start out with an enticingly low interest rate that will rise and fall with market trends. But the adjustable rate mortgage isn’t the best choice for everyone. Read on for tips on choosing the right mortgage product for your needs.

Advantages
There are a number of advantages to the adjustable rate mortgage. As we have already mentioned, the introductory interest rate is usually much lower than what is offered for a traditional 30 year mortgage rate. However, that low rate can change periodically, usually based on the rise and fall of a 1-year US Treasury Bill or another similar benchmark. If it appears that rates are in a dropping mode, an adjustable rate mortgage might be the way to go.

This is also a good choice if you will be needing extra cash during the first year of the loan for home improvements or landscaping. However, going into debt during this time will cause a significant problem if your monthly payments end up rising before your balance is paid in full. Some homeowners will also opt for an adjustable rate mortgage if they are not staying in the house long, since the rates won’t have time to max out during a shorter term. You can also begin with an adjustable rate mortgage and then refinance as the rate begins to rise. However, keep in mind that refinancing will be done at the current market rate, which may be higher or lower than your original rate.

Disadvantages
The adjustable rate mortgage isn’t the right choice for everyone. It should not be used to get into a more expensive house than you can afford, since a rise in rates may make the home too expensive much quicker than you’d like. It is also important to understand the terms of the loan thoroughly, such as how often the interest rate can fluctuate and what the caps on those fluctuations might be. Many people are unpleasantly surprised by how much their monthly payments can go up with the rate fluctuations, so make sure you are prepared for any additional mortgage expense that might arise.

The adjustable rate mortgage isn’t right for everyone, but it can be a savvy financial choice for some. If an adjustable rate mortgage sounds like the right loan product for you, talk to a loan officer about the ins and outs of the loans they offer and make sure you understand the terms perfectly before you sign on the dotted line.