I want to share more about the interview with you. I found it absolutely fascinating to be able to pick the brain of the mortgage consultant. Let’s face it, there are a lot of things going on in the industry, not necessarily all good. So I was able to pose some in depth questions to Ms. Furbush.
Question: With all the increases and ARMs that are continuously raising, what would you recommend someone do that is beginning the homebuying process?
Furbush: I usually suggest a fixed rate loan. When you become a new homeowner you now have new expenses and it can be a bit overwhelming. Having a fixed fate will give you some stability in your new experience. You will know month-to-month what you need to budget to be able to make your payments.
Now, there is an ARM called Pick-A-Pay. This ARM gives you the choice of four different monthly payments. Interest only (no principal deduction), minimum payment (satisfies lowest required amount due and can increase your loan amount), 15-year fixed (fastest payoff) and 30-year fixed (standard payoff).
Having an ARM as an owner-occupied buyer, you would need to be disciplined with your finances. However, there are people whose income varies from month-to-month (commission) that chose to have a Pick-A-Pay ARM.
I had not even heard about Pick-A-Pay ARM which might be beneficial for someone. But I have to agree with Ms. Furbush, you must be disciplined with finances in this situation. Otherwise you can end up in a less than favorable situation fast. If you are a mortgage broker and has used the Pick-A-Pay ARM, share with the readers what you have found as the “type of consumer” that chooses this option.
