Should You Purchase a Home Using AMPS?
Honestly, in my humble opinion, an AMPS transaction can work if your credit score is pretty close to where it needs to be to obtain a conventional loan. If you have a poor credit score but those involved in the AMPS transaction feel you have adequate income to make monthly payments and then you fall behind, you’ll lose a lot of money.
All AMPS transaction documents warn you should obtain the advice of an attorney before you sign. In fact, they warn it over and over again within the “closing" or should I say “assigning" of documents. Get an attorney to review them first. They may be able to work with the law firm holding the trust deed if you decide to actually contact the lender or when you obtain your own mortgage.
There are many skeptics about Phil Grove and his AMPS—actually calling them fraudulent transactions, however, all the documents prepared in an AMPS transaction are legal and do reveal the ins and outs of what could happen, much like any other mortgage loan.
Always keep in mind that while 99 percent of the time, if a lender is receiving timely payments, the account most likely won’t be their main concern—but there is that other one percent!
I also do believe that Mr. Grove found a loop-hole to get people into homes at reasonable prices and homeowners who can’t afford payments out of their homes, a sort of win-win but people should read the posts on the Internet about the AMPS being a scam or fraudulent. I’ve listed a link on the cons of AMPS in the reference section below to aid you in making a decision, but most you'll find are blogs on people who defaulted and are, therefore, complaining just to complain.
If you’ve entered into an AMPS transaction to purchase a home, how did it go? I’d love to hear your experience. On the other side of that coin, if you’re considering whether the AMPS route may be right for your needs and you have any questions, pop me a comment, I’ll do my best to find the answer.