Monday, April 28, 2008

Home of their own

My son is a self-employed graphic artist and although he would like his own home it is difficult to get a mortgage when you work for yourself. He  and his wife and two sons live in a two bedroom apartment on the third floor of a nice building but space is cramped and there is no yard for the boys to go out and play.

I don't know if they have a good or bad  credit rating, although he makes a good income he is paying off student loans, and  like all young couples they are struggling to pay the bills and to have a home of their own seems like a dream that will never materialize . If they were able to get a mortgage for a home I think I would suggest an adjustable rate mortgage as the bank rates seem to be dropping right now and it would seem a bad idea to tie yourself into a fixed rate unnecessarily.

1 comment:

Dana Seilhan said...

But... people getting ARMs is exactly what has fed the housing meltdown. He's better off with a fixed rate. Interest rates at the Fed, in fact, just got dropped again. This is a buyer's market right now.

I always, always, always tell people they're better off with fixed, though. And you aren't totally stuck. You can refinance later if the interest rate drops below what you are paying now. But if the interest rate on an ARM adjusts upward to a degree you can no longer afford it, then you really *are* stuck.