“Hi Gary. With all the dangerous loan programs out there, do you think the safest thing is to get a basic 30 year fixed loan?”
***ANSWER:
Im about to say something you and many people will disagree with:
There are NO dangerous loan programs.
Not one.
Not the pay-option ARM loans.
Not the short-term adjustable loans that adjust up in 2 years.
Not the negative amortization loans.
Not the zero down loans.
Not the loans to people with bad credit.
Yes, these are the very same loans that people have had and been unable to pay their mortgages and have lost their homes.
But heres what I mean
All of these loans can work just fine for 98% of the people who plan ahead, leave enough of a margin, are realistic about their abilities, and set aside money for a rainy day.
And all of these loans can be fatal for 98% of the people who dont. (Understand: I am not blaming or judging anyone. Those in this group are certainly not bad people, though they may be bad planners, etc.)
Now that Ive gone off on that tangent, perhaps Ill answer your question!…
A 30-year fixed rate is 100% predictable, so for many people that may make it the safest loan. Though its typically also the most expensive.
A fairly safe compromise for many people is a 5-,7-, or 10-year adjustable.
These loans are fixed for the 5, 7, or 10 years, and then they adjust. And since the average person owns their home for something like 7 years (Im guessing, but it seems about right), it can be a way to have some stability and get a slightly lower rate.
That all being said, if you need a home loan and dont have a good lender, I have a great one. Call my office at 858-457-KENT and Ill put you in touch with him.
