As the home market slow down continues, many home owners are concerned about interest rates rising and making their adjustable rate mortgage loans unaffordable.
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24%; nearly 1 out of every four homeowners in the U.S., has an adjustable rate mortgage versus a fixed rate, and initial rates on adjustable mortgages have gone up faster. For example: someone with a $200,000 loan taken 3 years ago and who is now facing an initial rate reset, may see a payment increase of nearly $400 per month.
The senior financial advisor of BankRate suggests homeowners facing an adjustable rate rest should consider refinancing to a fixed rate, to save money over the long term.
Many people who had opted for an adjustable rate mortgage loan did so due to factors; such as bad credit and lower income, which enable them to more easily obtain loan approval.
Meanwhile, home foreclosures are increasing nationwide, up 43% from last year.
Some 318,355 homes entered a foreclosure stage in the third quarter, a 17% increase from the second quarter.
Interest rates and the home market slowdown are being blamed as the primary culprits to the foreclosures.
Foreclosure Numbers on all types of mortgage loans:
Month Amount
July 93,845
August 113,300
September 112,210
Visit Credit Federal to refinance from an adjustable rate mortgage, or to apply for a new home loan.
