Mortgage Loan Q & A

A Wells Fargo financial rep recommended that I go with a 10 year ARM (adjustable rate mortgage) is she right?

How does the 10 year ARM work? Does it vary after the 10 years or during the 10 years? I don’t know if I trust Well’s Fargo and their reps. She sold me a package that locks me into a 10 year ARM for 6 months and 60 days from close I can lock into the lowest rate at a time I choose. It cost me 1% of the purchase price of my “soon to be built” home – non refundable. I heard alot of people getting in trouble with a ARM. Please any info would help.

The only reasons to go with an ARM are:

1) You are buying a property in which you expect to sell it in less than 18 months

2) You need the lowest possible payments now but can qualify for a fixed loan (but higher payments) within 12 months

Otherwise, an ARM is just getting you into a loan that is fine now but will likely be a financial disaster down the road. Also, most ARMs have a 12 month fix. A 6 month fix is not good.

Attorney General Terry Goddard Reaches $150 Million Mortgage Relief Agreement with Wells Fargo

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