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Old 05-11-2010, 12:25 PM
 
Location: S.C.
780 posts, read 1,541,962 times
Reputation: 235

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After reading a post here about FHA, Fannie Mae and Freddie Mac, I was wondering what are the best deals around when it comes to home financing?

Are people still getting ARMs? A friend just financed his home through the builder and got a 100% loan at less than 5%. Is this the way to go now?
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Old 05-11-2010, 12:46 PM
 
Location: Simpsonville
93 posts, read 165,855 times
Reputation: 32
Noone is really getting arms right now because they have a bad rep. They are ok in a very small number of situations. Of course the more you can put down the better you are. If you ever need to sell in an emergency you will have equity in the home and be more likely to get out of the deal without being "short" which will effect your credit. If you do 100% financing your payment will be larger and you will have no equity. So you're looking at a few years, more than likely before you're at a break even point, investment wise. There are lots of people doing 100% options now adays. it depends on how much money you've got in the bank and your long term goals. I'm sending you a private message.
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Old 05-12-2010, 07:57 AM
 
Location: Summerville, SC
662 posts, read 1,410,709 times
Reputation: 136
Interest rates are so low now arm's aren't popular. With a FHA loan you only need 3.5% for a downpayment. With interest rates and home prices so low, now is a terrific time to buy.
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Old 05-12-2010, 08:07 AM
 
435 posts, read 834,932 times
Reputation: 75
Unless your friend is really rich and just using ARM for cash flow purpose, your friend is an idiot and clearly can't afford the house and haven't learn the lesson. I am more worry about that your friend just fall for a scam because legit ARM these days is almost impossible unless you have cash in the bank to repay the loan out-right.
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Old 05-12-2010, 09:47 AM
 
3,145 posts, read 5,956,375 times
Reputation: 1261
If you have the money to repay the loan outright, then why waste the money on a loan in the first place?

ARMs are very stupid and part of what is causing all the foreclosures.
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Old 05-12-2010, 10:01 AM
 
435 posts, read 834,932 times
Reputation: 75
Cash flow and tax purpose...the loan is not really a loan but a simple instrument to save some money. A real ARM usually don't last more than 6 month even though the term is around 3 to 5 years, or at least, that the original purpose of the ARM.
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