Kudos to The Equitable Bank

Several years ago I purchased some investment duplexes. To get the lowest interest rate possible, I did what many, many other people were doing at the time...getting an adjustable rate mortage. I knew that it would adjust in 3 years, and I knew the maximum it could adjust was 2%. The first two mortages were with St. Francis Bank, and I was very happy with the service I recieved from them. Unfortunetly, they were bought by Mid America Bank. When the 3 years were up, they adjusted. However, much to my surprise, they did not adjust to the current interest rate. Rather, they adjusted the maximum amount they could! This new rate was way above the the normal interest rate, causing me to incur the cost to refinance, with a different company of course. I was lucky that I was able to refinance...my credit was good, my loan to value was good, and the properties had not depreciated in value. This is where many other people ran into problems though. When their ARMS adjusted, they weren't as lucky.

So this month, my ARM was due to adjust on my 3rd property. I was expecting the worst. However, my lender for this one, The Equitable Bank, did NOT adjust the maximum amount they could. Rather, they adjusted to an amount LOWER than what I could get if I did a refinance! While my payment did raise, it went to a reasonable amount, better than I expected. So my hat goes off to The Equitable Bank! Their action shows they really do care for their customer.

PS my loan officer is Cara Reese, out of the Delafield office! I'd recommend her to anyone.

Foreclosure Crisis

Foreclosure Crisis

September 6, 2007

I was watching the nightly news tonight, something I rarely do since my tv never changes from the Nickelodean/Cartoon Network, and a story was on named the 'Foreclosure Crisis'.

Granted the media usually makes the real estate market seem much worse than it is, this is actually a true crisis that is happening within our present day market.

The first thing to do to correct this is to find what caused it. The main reasons: loose lending requirements and adjustable rate mortgages. Combine these two together with a borrower who only lives for the moment and you've got trouble just waiting to happen.

An adjustable rate mortage will have a 'teaser' rate to begin with, typically for 1 or 3 years. This teaser rate, 3 years ago, was much, much lower than the normal 30 year fixed rate mortgage. And the lending requirements....bad credit, no credit, no downpayment....some of these lenders were just letting it all fly out. Recently, a lot of lenders have gone belly up. 3 years ago it was still a seller's market, and some people were paying over inflated prices for their homes. That is part of the reason why they can't just refinance now...the property isn't worth what they paid for it!

So what can a new borrower do to make sure they

don't fall victim to the mortgage crisis? Have a nice amount saved up for a downpayment, that way you'll have wiggle room should the market decline. Also plan for the long run. Go with a fixed rate mortgage so you know your payments won't increase. You'll also need to keep your credit score up. Lenders are becoming much stricter in their lending practices.

Remember, right now it is a BUYER'S market. With historically low interest rates and alot of inventory to chose from, right now is a great time for a well qualified buyer to buy!