Mortgages to Avoid

Mortgages to Avoid

ARM vs Reverse Mortgages

Two Types of Mortgages to Avoid

Adjustable Rate Mortgages and Reverse Mortgage

Adjustable Rate Mortgage

• Commonly called ARM Mortgage- A mortgage with an interest rate that changes based on the market conditions

• The intention is to transfer the risk of higher interest rates to you and in return, the lender gives a lower rate up front

• Since they can qualify for more home, many people find this mortgage appealing; however ,as many homeowners learned in the economic downturn, if your rate adjusts higher or you lose your job, your payment can quickly become too much for you to afford

Reverse Mortgage

• A reverse mortgage is when a homeowner borrows against the equity in their home and obtains monthly, tax free, payments from the lender.

• This mortgage is a bad idea because you are putting a paid for home at risk and the fees are horrible in fact , the FTC claims that reverse mortgages have the most fraud in the mortgage business

• This is really never a good idea!

Multiple Choice

This is the mortgage with the most fraudulent activity with mortgages?

• 30 year Mortgage

• 15 year Mortgage

• Reverse Mortgage

• Adjustable Rate Mortgage

Multiple Select

Which two are the worst two mortgages to get.......

• 15 year mortgage

• Adjustable Rate Mortgage

• 30 Year Mortgage

• Reverse Mortgage

Multiple Choice

A mortgage with an interest rate that changes based on the market conditions is called

• Reverse Mortgage

• ARM Mortgage

• Credit Card

• 30 year mortgage