New Homes Beach Gardens

Before buying a new house you'll want to spend a lot of time thinking about how you're going to finance it. You must be very careful because Congress deregulated much of the financial industry years ago and lenders have rushed into the market with loans that before would have been called outright preditory. Here's a good trap to avoid.

Many lenders were offering to provide a mortgage for no money down and a super low 'teaser' interest rate. In one case a family bought a new $550,000 house for no money down and a 'starter' intrest rate providing them a $3,500 a month house payment. In three years the loan would 'reset' to a whopping 14% interest and a back breaking $6,500 a month house payment.

Then the housing bubble burst in late 2006. The developer of their subdivision is selling the same floor plan new houses for $395,000. That's $155,000 less than our couple paid two years ago. Now their loan is going to 'reset' in the next 6 months and if they can sell the house at all at $395,000 the bank wants $155,000 at the closing. They don't have it. Neither can they afford a $6,500 house payment.

Their house will go into foreclosure and they will lose everything. The morale of the story. Don't trust the mortgage banks. They're looking out for their own interest, not yours. Don't get involved with any such schemes. You'll pay dearly for it.