Graduated Mortgage Payment Insurance
I am sure you are aware that I absolutely love learning new information and sharing it with our readers. If information that has been shared keeps you from spinning your wheels and making wrong choices, it is all worth it. One factor of that is are you ready to receive the information and apply what you learn. I have to tell you, it is crucial that whether you are dealing with home ownership or any other area of your life, you must remain teachable. If you do not you are setting yourself for a lot of mistakes.
With everything that is happening in the real estate and housing industry, I don’t believe you can ever get too much information about different types of loans. I have decided to share with our readers about Graduated Mortgage Payment Insurance. This is also called Section 245. Section 245 enables a household with a limited income that is expected to rise to buy a home sooner by making mortgage payments that start small and increase gradually over time.
I have to share right now even though I know it is not. Sounds almost like an ARM. We all know that FHA administer mortgage insurance programs that assist low and moderate income families become home owners by lowering some of the initial costs of their mortgage loans. I must admit I can see how this might help different job professions; however, I would recommend that a consumer look at the timing of when they are expecting to receive that increase and when they want to purchase.
We have all heard, “TIMING” is everything. It is whether it is purchasing a house, a car and even choosing a loan. Let me caution our readers and say do not be too hasty and end up in a situation that has dire consequences. Take your time and read about all the different types of loans and discern what best fit your needs, paycheck and how you want your picture of the American Dream to look.
If you are a potential homeowner and considering a graduated-payment mortgage to purchase a home you must remember you monthly payments to principal and interest will increase each year for up to 10 years, depending on which of the five available plans they select.
Let me share some of the details about the plan. Three of those five plans permit mortgage payments to increase at a rate of 2.5, 5, or 7.5 percent during the first five years. Needless to say if you have not prepared for this during those five years, you could end up in a very sticky situation. The American Dream begins to turn into a nightmare. Research, research and more research. The other two plans permit payments to increase 2 and 3 percent annually over 10 years. It is great to have options. Make sure you are honest with yourself about your finances before you begin your journey of home ownership.
Dr. Taffy
