Thursday, August 31, 2006

Mortgage Worries

Having purchased a medium-sized home about 2 years ago, these type of articles concern me. Hindsight being 20/20, I'm glad I didn't take the too-good-to-be-true type of offers that mortgage lenders were offering at the time. I also insisted on a flat rate loan. If you've got a mortgage hanging over your head, break out the paperwork and read all the terms again. I would suggest adjusting and preparing accordingly for the worst if your loan falls into one of the categories mentioned in the housing articles, such as the ones linked below. Even if it doesn't, you'll probably have to prepare for home devaluation or other side-effects of a bubble bursting (such as job losses) which will likely effect everyone across the board.

The Great Housing Crash of '07
The housing bubble is a $10 trillion equity balloon that will explode sometime in 2007 when more than $1 trillion in no-interest, no down payment, adjustable-rate mortgages (ARMs) reset; setting the stage for massive home devaluation, foreclosures and unemployment. ("By some estimates housing activity has accounted for 40% of all the jobs created since 2001". Times Online) July's plunging sales are just the first sign of a major slowdown. The worst is yet to come.

Nightmare Mortgages
They promise the American Dream: A home of your own -- with ultra-low rates and payments anyone can afford. Now, the trap has sprung.

Those who took the bait are in for a nasty surprise. While many Americans have started to worry about falling home prices, borrowers who jumped into so-called option ARM loans have another, more urgent problem: payments that are about to skyrocket.

Foreclosure filings up 34% in Palm Beach County


Post a Comment

<< Home