Investing Trends

What I am talking about is Adjustable-Rate Mortgages (ARM)...

The definition of an ARM is: A home loan that permits the lender to adjust its interest rate periodically during the life of the loan on the basis of changes in a specified financial index.

ARM's typically start with a lower interest rate that gradually rises over time. If the financial index to which the loan is tied decreases, the interest rate of your ARM follows suit. Similarly, if financial index rate rises, so does your loans interest rate and monthly payment.

I would caution you with this type of loan because almost half of all American households have adjustable rate mortgages. When their payments go up, they can't afford the new payment. After you are done rehabbing your home, be cautious of the type of loan the buyer is getting. Make sure you are working with an ethical loan officer that is if you refer your buyer to your loan officer.

I also want to caution you on wearing too many hats. Don't be the rehabber, the loan officer , the title company, and the insurance agent. If you are more than one of those make sure you disclose it and make sure they sign something stating that they were aware of the no-arms length transaction.

I have only scratched the surface with these great tips for finding money to fund your deals and how to handle your contractors. In my system, Renovate Your Success, I can show you what you need to know about rehabbing property and the tools you need to be successful.