Adjustable Rate Mortgages


ROYAL BLUE said:
I don't know why people buy homes and purchase a 30 year mortgage. I bought my first home in 2003 with a 15 year mortgage, and I'm kicking myself in the azz because I should've gotten a 10 year. That means I would've had 4 years left on my mortgage with a fixed rate of 5.2%. It's all good because in 9 years I'll "OWN" that home at the age of 39. This means I can take the early retirement and enjoy long vacations with my wife. If your home and vehicles are full paid, what are you working for? You're working for yourself and you'd be living debt free.
Click to expand...

It may have been a very shallow reason, but for me, I got a 30 year fixed rate, because I knew I was not going to live in the same house for an extended amout of time (2-5 years max). At the time I purchased my home, I went in with the guarantee that if a job opportunity presented itself in another part of the country, my company would either allow me to sell my home or buy it from me.
 
Tony said:
Been there done that.
Your HUD homes will become money pits. HUD people are not the ones paying
so they don't care about the property, they will destroy it & you will always be reparing something, and before HUD allows you to rent to another
HUD person your property has to reach required standards, And if your not
living in the same state with the property you have No idea of the damage that's occuring from termites to nuccamites.
and 750 lol HUD ain't payin' 750
Click to expand...

I agree. One day, they will tear your shat up. Secondly, I wouldn't want to get in business with the government, then they are your landlord. Last of all, there is no such thing as a side agreement. The contract with you, HUD, and the renter superseeds all other "side contracts". So if you don't get that extra $145/month on the side from the renter, there is absolutely NOTHING you can do about it. One, it is ILLEGAL because your agreement to accept HUD money was to not collect any SIDE MONEY from the renter.
 

This is what I can think of just off the top my head.


If you go HUD, HUD picks the tenants, not you

IF your property is in Jackson, you earned the money in Mississippi,
You have to pay MS state taxes.

Hinds County just increased property taxes.

What kind of insurance you got on these properties?
What if someone gets hurt on your property?

You talking about appliances, plumbing, heating & ac
HUD people break windows, put holes in walls, have
Roach & rat infestations, doors start sticking, and not closing
Correctly, kill the grass because they bar-b-que in the front yard etc etc

After a HUD person destroys your home they just move on, leaving you to clean
And fix the mess, and you have to do it in order for HUD to send a new tenant.

Now if you get the mortgage out the way, you might have a chance to make some money.

BUT remember

Responsible people move when HUD folks come. Nobody likes to pull out their driveway and watch the HUD folks sitting on the porch doing nothing but watching their house. HUD folk tend to attract other HUD folks in order to have someone to hang out with during the day because they don’t work. HUD gives those vochers to welfare women who in turn bring their men over.
Now the neighborhood has become the hood, insurance rates go up, property value goes down, and more people live in the free HUD house than it was designed for.

You become known as a slum lord, and end up owning something that you won’t even
go to at night.
 
Last edited:
Tony said:
This is what I can think of just off the top my head.


If you go HUD, HUD picks the tenants, not you

IF your property is in Jackson, you earned the money in Mississippi,
You have to pay MS state taxes.

Hinds County just increased property taxes.

What kind of insurance you got on these properties?
What if someone gets hurt on your property?

You talking about appliances, plumbing, heating & ac
HUD people break windows, put holes in walls, have
Roach & rat infestations, doors start sticking, and not closing
Correctly, kill the grass because they bar-b-que in the front yard etc etc

After a HUD person destroys your home they just move on, leaving you to clean
And fix the mess, and you have to do it in order for HUD to send a new tenant.

Now if you get the mortgage out the way, you might have a chance to make some money.

BUT remember

Responsible people move when HUD folks come. Nobody likes to pull out their driveway and watch the HUD folks sitting on the porch doing nothing but watching their house. HUD folk tend to attract other HUD folks in order to have someone to hang out with during the day because they don’t work. HUD gives those vochers to welfare women who in turn bring their men over.
Now the neighborhood has become the hood, insurance rates go up, property value goes down, and more people live in the free HUD house than it was designed for.

You become known as a slum lord, and end up owning something that you won’t even
go to at night.
Click to expand...

No, you send an ad to the housing authority and they put your ad on the wall for the tenants to see. The tenant will then look at the ad and call you if they're interested. If a tenant is interested in the home, they must notify the housing authority, and HUD sets an appointment with you to certify the home. Once the home is certified, you send in the contract and it's a done deal. You choose your own tenant.......not HUD.

If you had all those problems with your home, then you chose bad tenants.

All I can say is I'm doing very well for myself, and all of my HUD homes are full paid. I just need to full pay "my" home and I'll be debt free.
 
Braveman12 said:
It may have been a very shallow reason, but for me, I got a 30 year fixed rate, because I knew I was not going to live in the same house for an extended amout of time (2-5 years max). At the time I purchased my home, I went in with the guarantee that if a job opportunity presented itself in another part of the country, my company would either allow me to sell my home or buy it from me.
Click to expand...

If a person must get a home loan, then they should get something they can pay off in 5 years. You may have to live very moderate, but at least you can say your home is full paid. It beats being retired and still paying a mortgage.

I understand your logic though.........
 
the tenant has to be Certified by HUD in order to look @ your add, therefore HUD
Controls the pool of tenants looking @ your add.

Now you’re saying you got all these paid for HUD houses
But STILL owe on the house you’re living in?!?!!

Seems like a backwards hustle

Why wont you sell some of those houses and pay off the one you live in.

Certainly it couldn’t be because the value of all your houses combined
Doesn’t equal what you owe on the 1 you live in.

You could even take out an equity line on the hud houses pay off your mortgage & STILL own the HUD houses.

What's the point in STILL carryin' a mortgage on ya primary residence?
 
ROYAL BLUE said:
If a person must get a home loan, then they should get something they can pay off in 5 years. You may have to live very moderate, but at least you can say your home is full paid. It beats being retired and still paying a mortgage.

I understand your logic though.........
Click to expand...

BUT you just said your home ain't paid for!!??!!!

You said you got some paid for HUD homes, but not the one you live in??!!!
 
Tony said:
the tenant has to be Certified by HUD in order to look @ your add, therefore HUD
Controls the pool of tenants looking @ your add.

Now you’re saying you got all these paid for HUD houses
But STILL owe on the house you’re living in?!?!!

Seems like a backwards hustle

Why wont you sell some of those houses and pay off the one you live in.

Certainly it couldn’t be because the value of all your houses combined
Doesn’t equal what you owe on the 1 you live in.

You could even take out an equity line on the hud houses pay off your mortgage & STILL own the HUD houses.

What's the point in STILL carryin' a mortgage on ya primary residence?
Click to expand...

Why would you sell a PAID FOR home to pay off the house you're living in? Just pay more on the principal of the home you live in with the extra money you are making from the rental properties. You don't need to get rid of INCOME to pay off a home on which you won't make any extra money.
 
Tony said:
BUT you just said your home ain't paid for!!??!!!

You said you got some paid for HUD homes, but not the one you live in??!!!
Click to expand...

I'm giving advice that wasn't given to me before I bought my home. I wish a person would have begged me to get a 5 year mortgage. The reason it's not full paid is because of private school(4 kids). My funds are low after all of my expenses. Secondly, no one lives in that home, the home is in Jackson and I'm in Nashville. I rent a home in Nashville for me and my family.....$1k per month. We'll return to the home in Jackson once we leave Nashville.
 
Tony said:
the tenant has to be Certified by HUD in order to look @ your add, therefore HUD
Controls the pool of tenants looking @ your add.
Click to expand...


Correct, but "I" choose who I want out of the pool.


Why wont you sell some of those houses and pay off the one you live in.
Click to expand...

I want to build wealth for me and my family.


You could even take out an equity line on the hud houses pay off your mortgage & STILL own the HUD houses.
Click to expand...


My main goal is being debt free, so loans would not be an option. All I have is just 9 years on contract, but I think I can full pay it in 5 years.
 
Da_Sperm said:
As much as these types of loans have gotten the country into a complete mess, I still say the right type of ARMs are the best loan products. Ten years ago, we bought our first house and we had a 7% fixed rate loan. After years of paying this loan, I felt I didn't have the right loan for my needs, so I started researching ARMs. I found out mathematically that I can beat the systems with an ARM.

So on our 2nd house we got a ARMs (5 year fixed, adjust each year for the next 25 years). Here is the terms of the loan.

Rate: 4.5% for 5 years
Adjustment period: Once a year after the first 5 years.
Adjustment Rate: + or - 2% of the previous rate
Adjustment Term: 2.75 + One year T-Bill

When we got this loan, the rate of a 30 year fixed loan was 6%. So I paid the loan like it was a 6% loan. After 2 years, my property increase in value and I was able to DROP the PMI, which was $96 per month, I simply kept paying that amount on the principle each month.

Since I have direct deposit, I get a 1/8% discount on the rate, so my rate has been 4.375%, not 4.5%

Five years later, the loan adjusted on 3/15 to 3.5%. The rate is published on the US Treasury website. http://www.ustreas.gov/offices/domestic-finance/debt-management/interest-rate/yield.shtml.

My mortgage dropped $200 and all I have done is paid the note just as if I signed a 30 year 6% rate from the start. Now, my rate will be 3.375% (with discount) for another 12 months and I'm still going to pay the original amount like it was a 6% fixed rate mortgage with PMI still on it.

If I would have chosen the 30 year 6% fixed rate, I would have had to pay way more to be at my point now on my principle.

Don't sleep on ARMs, they can be your best friend!
Click to expand...

That sounds good for your situation, but each area has it's own market and those loan conditions might not be applicable.
 
ROYAL BLUE said:
If a person must get a home loan, then they should get something they can pay off in 5 years. You may have to live very moderate, but at least you can say your home is full paid. It beats being retired and still paying a mortgage.

I understand your logic though.........
Click to expand...

Blue I kind of understand your logic too. I have to agree with you about being retire and trying to pay off a mortgage. Where I work now there is a lady who really needs to retire but she can’t because she has a house note and can’t not afford quit. Her knees are so bad that she screams every time she gets up from her desk. The house she has is a palace, but nothing is worth your health to me. I live in a very modest house that is not in an upscale neighborhood but it is paid for. In about 6 year I won’t owe anything and even hope to have my son out of college. (I told him I will stick with him until he gets his masters. He is in high school now) I want to be able to enjoy being retired doing nothing but waiting on a check. My grandfather spent almost 30 years retired and my mother and father are working on 10. In each case everything was paid for before retirement.
 
bigmanofds said:
Blue I kind of understand your logic too. I have to agree with you about being retire and trying to pay off a mortgage. Where I work now there is a lady who really needs to retire but she can’t because she has a house note and can’t not afford quit. Her knees are so bad that she screams every time she gets up from her desk. The house she has is a palace, but nothing is worth your health to me. I live in a very modest house that is not in an upscale neighborhood but it is paid for. In about 6 year I won’t owe anything and even hope to have my son out of college. (I told him I will stick with him until he gets his masters. He is in high school now) I want to be able to enjoy being retired doing nothing but waiting on a check. My grandfather spent almost 30 years retired and my mother and father are working on 10. In each case everything was paid for before retirement.
Click to expand...

It's a shame your co-worker is a slave to her mortgage, and you're right; it aint worth it.

I wish I could have gotten some of that wisdom your grandfather had back in the day. It's good to hear people tell you to save your money even when you want to spend it. It's also good to see old folks who use common sense, and it appears that wisdom runs deep in your family.

PROV 22:7 The rich ruleth over the poor, and the borrower is servant(SLAVE) to the lender.

I'm tired of being a slave to loans, and I pray God continue to bless us so we can all be debt free.
 
Here is a nice home that could be paid off within 1-5 years with an annual income between $60k-$100k. You could drop $15k-$20k to remodel and upgrade the home. The same home that costs $200k in Madison, Ms would cost you $70k in Jackson; with a reasonable upgrade of course. I'm thinking about purchasing this home if it's still on the market by next week. I have to talk it over with the wife. The first thing I would do is install a two car garage door, install a standby generator, paint all interior/exterior, upgrade cabinets, roof, flooring, bathrooms, security system, appliances, and if any money is left over, I'd enlarge the master bedroom to make it luxury. This could all be done for about $20k or less. Construction workers are desperate and they'll be "VERY" reasonable with their prices. This is moderate living at a more than fair price.

http://www.realtor.com/realestateandhomes-detail/5378-Cedar-Park-Dr_Jackson_MS_39206_1107857928
 

ROYAL BLUE said:
Here is a nice home that could be paid off within 1-5 years with an annual income between $60k-$100k. You could drop $15k-$20k to remodel and upgrade the home. The same home that costs $200k in Madison, Ms would cost you $70k in Jackson; with a reasonable upgrade of course. I'm thinking about purchasing this home if it's still on the market by next week. I have to talk it over with the wife. The first thing I would do is install a two car garage door, install a standby generator, paint all interior/exterior, upgrade cabinets, roof, flooring, bathrooms, security system, appliances, and if any money is left over, I'd enlarge the master bedroom to make it luxury. This could all be done for about $20k or less. Construction workers are desperate and they'll be "VERY" reasonable with their prices. This is moderate living at a more than fair price.

http://www.realtor.com/realestateandhomes-detail/5378-Cedar-Park-Dr_Jackson_MS_39206_1107857928
Click to expand...

I guess that works well in the south but on this end (west coast) you are not going to find to many deals like that.
 
GSU4LIFE said:
I guess that works well in the south but on this end (west coast) you are not going to find to many deals like that.
Click to expand...
Don't let that stop you if you want to invest. You can buy in the south too, even without living here. Some of Houston's biggest investors with 100s of properties, don't even live here in Texas. My cousin' girl does deals in other states.
 
Tony said:
If you go HUD, HUD picks the tenants, not you
Click to expand...

Brother, please forgive me because I forgot to mention the key to my success. Yes, I use common sense in my decision making, but I forgot to mention the real reason I select good tenants. I make it my business to ask God to help me with my selections, and to send those who are approved by Him. I always get excellent tenants because I ask God to make the best selection for me; He does it so well.


Always, always, always ask God "BEFORE" you make a decision. Never make a decision without asking God to help you, and never get into anything without including Him. This will keep the blessings flowing with less complications. By all means do your homework, but don't forget who knows more than you. He can do what you and I can't do, and that's read the hearts of humans. He knows who's bad and who's good. Get God involved and you'll be fine.
 
You must log in or register to reply here.
Back
Top