Loan Adjustment period

The period of time that elapses between the adjustment dates for an adjustable-rate mortgage (ARM). There is usually a minimum and maximum period stated in your loan docs. Find out what it is.

Your APR – the rate you are being charged in interest for your loan can not change more then a certain number of times in a certain period or maybe it can change when ever there is a published rate change? You should know this detail.

Bob’s advice – stick with a fixed rate loan.

If you can’t afford the payments on a fixed rate loan you can’t afford the house and should reconsider your purchase. Rent another few yrs until you have a better job and more money saved for your down payment. Or buy a smaller house.

Another of Bob’s tips – smaller homes are always more easy to sell and often will appreciate faster then larger homes.

It used to be a sort of forgone conclusion that real estate always goes up.

That is not the case now. Remember that a realtor gets 6% for selling your home. on 100,000 that is 6000.00 bucks. If your home does not appreciate enough to cover this your in the hole.

I once bought a small home knowing over a 3 yr period I might lose money due to real state agent fees. I did lose $6000.00 but considered it an acceptable amount to lose.

3 x 12 months = 36.

6000.00 divided by 36 = $166.66 per month cost to live in that home for 3 yrs.

There were other expenses but not enough to really hurt me.

In the end it was a cheap price per month so the loss was not considered a real loss due to the fact that renting would have cost me $600.00 to $800.00 per month for an equal size house.

Always look at the big picture when you are considering the purchase of a home.

Don’t go overboard and buy “the big house” you can’t really afford.

The people you are trying to impress will not help you make the payments.