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Business Development

Adjustable Rate Mortgages: Rearing Its Ugly Head

2018-5-31-260.jpgWe all know the old adage, “If it seems too good to be true, it probably is.”

Well, this tends to be my take on Adjustable Rate Mortgages (ARMs).

Hey Moguls, Jason Lucchesi at your service. You may or may not have noticed, but ARMs have really been making a comeback.

...And I’m NOT the most excited person in the world about this.

Let me tell you why...

Since my background includes experience in the mortgage industry, I feel confident giving my insight on this: I don’t think ARMs are going to be good for us. In fact, I think these could lead to disastrous market issues.

When it comes to ARMs, lenders typically give these to borrowers with exceptional credit. (And that, by the way, was how these were done in the early 2000s too.)

But up until the 2008 market crash, people could get 100% financing with as low as a 580 FICO score. (I know, why did lenders do that... right?!)

So, what does all this mean for investors?



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