The highest foreclosure rate in the United States is really the result of the greed of the Mortgage Industry, itself. Are you surprised at this statement?
Why? What the Mortgage Industry has done to the uninformed applicant was present mortgage programs which they KNEW should never have been presented to the them.
The worst product presented to mortgage applicants was the Adjustable Rate Mortgage. Normally, this product was presented to applicants who would not have qualified for a Fixed Rate Mortgage or a Bi-Weekly Payments Mortgage.
You could buy more house with an Adjust Rate Mortgage was the big selling point. WOW, that's GREAT (the prospective borrower would think).
But the facts of the damage an Adjustable Rate Mortgage can do to the borrower financially were not considered. After all, when the first (1st) payment increase takes place, you will probably be making a higher income with salary increases, bonuses and better positions.
Really! think of what the increased payment might include:
1. Principle and Interest Increase (2% rate increase, depending on product presented, on a $100,000 Principle Balance would be an increase of approximately $167.00 in INTEREST alone monthly.
2. Real Estate Tax Increase
3. Home Owner's Insurance Premium Increase - this usually occurs as the value of your property increases.
As an example, a county about 10 miles from where I live has
informed the home owners that a reassessment will be taking
please within the next 12 months. The new assessed value will be used to determine the real estate taxes for 2010.
The last value assessment in this county was 40 years ago.
Could you imagine the real estate tax increase which will occur? I would estimate that the real estate taxes will either double and maybe triple.
Another question I have is:
How many mortgage companies advise their prospects to check out:
www.buying-a-home-info.com/home_buying_grants_by_state.htm or
for first-time home buyers to check:
www.buying-a-home-info.com/grants_for_buying_a_home.htm
and another excellent site chuck full of information:
www.americandreamdownpaymentassistance.com/down_payment_grant.cfm
In fact, how many mortgage companies and/or realtors ever suggested to borrowers and/or buyers to go on the computer and go to:
www.google.com and search the internet for Home Buyer Grants
There are Billions of $$ available for such grants and not used to the fullest.
I may be wrong or have not talked to the right people but I do not know of anyone that has received this information from any Mortgage Company nor Realtor.
Why Not?
If the person looking to buy a house could get a grant from any of these sources, they would probably save them over $100.00 and sometimes much more monthly for Private Mortgage Insurance (PMI).
PMI is a requirement by mortgage companies if the borrower does not have sufficient personal savings to put a 20% deposit on the house they wish to purchase. PMI DOES NOT protect the borrower. It protects the Mortgage Companies on loans that are not FHA Insured nor VA Guaranteed.
I want to make a definite statement here for Mortgage Applicants:
If you have a Mortgage Broker and/or a Real Estate Person that has advised you of the above stated information regarding Home Buyers Grants, stick with them because your have Professionals Take Care.
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Contributor's Note
I feel that is you plan to purchase a property within the next 6 to 12 months that you take the time to obtain as much information as possible to be well informed.
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