Check out the local and national real estate trends and headlines that made the news this week.
Several news articles this week discussed the Adjustable Rate Mortgage. Specifically, the new ARM model (5-1) and weighing in on the tax implication of the ARM. Technological advancements (blogging, Craigslist, Zillow) also made headlines.
Kenneth Harney of The Washington Post discusses the new breed of Adjustable Rate Mortgages in his article, These ARM’s Have Legs. He goes into the benefits of the 5-1 ARM if you think you’ll be moving in five years. He quotes Frank Nothaft of Freddie Mac:
“Frank Nothaft, chief economist for Freddie Mac, says the 5-1 adjustable not only offers a slightly lower cost compared with competing 30-year fixed-rate loans, but also locks in monthly payments for the first 60 months — a big plus for people who expect to sell, move or refinance within a few years.”
Harney then goes on to warn consumers that the 5-1 ARM reverts to market rates after five years and updates every year thereafter. The ARM’s could be a good option for people who are very disciplined and have a plan, but I wouldn’t fall back on this if you can’t afford the 30 year fixed. I would suggest spending less on the sales price of the property and be more conservative on your loan package.
Benny Kass of The Washington Post also mentions ARM’s in her column, Counting on Tax Deductions? Be Sure to Count Them Right. She argues that after the tax deduction, the difference between a 30-year fixed and an ARM is not that dramatic. And, the ARM will be much larger in a few years. She also discusses more tax benefits to purchasing.
Another article I found interesting was the CNN article, New Tech Trends Rock Real Estate World. The article talks about blogging, new search tools, and other tech developments that consumers and real estate professionals are using in todays world. The closing statement sums it all up:
“Inman says that real estate professionals have two choices when it comes to confronting the changes wrought by technical advances: engage it or pretend it isn’t there. It’s easy to guess what route he recommends.”
To view more articles from The Washington Post, RealEstateJouranl.com, CNN.com, and Bankrate.com, click here
