In Real Estate Loans, what is 6.22 ARM? Is it Adjusted Rate maximum/minimum?

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It sounds to me like the real estate market’s way of tricking a buyer into making an adjustable rate loan so they can raise rates whenever they feel like it and then when you can no longer pay the mortgage, they foreclose on you so they can resell at a higher price and interest rate. You can’t trust businesses anymore than you can the world governments. Only in USA can you try to fix it.

3 Comments
  1. Reply
    Janet P
    April 29, 2011 at 10:44 pm

    It isn’t a trick, it is clearly stated before the money is given to the borrower that it is an adjustable mortgage, if they want a fixed mortgage they are free to obtain that instead.

  2. Reply
    Paul D
    April 29, 2011 at 11:15 pm

    Adjustable Rate Mortgage

    It’s not at all a trick, although it’s frequently not a very good deal. And in cases of foreclosure it’s extremely unlikely that the mortgage holder comes out ahead.

    An ARM usually has a lower rate than a fixed rate because it has (or appears to have) more stability for the mortgage holder. If a loan is made at a fixed rate of 6% but interest rates go up to 8% then that is not favorable for the lender. If rates go down to 4% it’s not favorable for the borrower.

    An ARM can be a good tool when interest rates are high but declining, but for the most part it’s a gamble the average person should not take.

  3. Reply
    kemperk
    April 29, 2011 at 11:20 pm

    a 6.22 arm is the highest I have ever seen. most start off at about 1.8.

    it is a minimum; increasing every quarter or 1/2 yr

    U can trust most businesses and a few banks

    it is not the arm that people could not afford, it was the increase in the price of gas.

    check it out.

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