More Mortgage Resets In The Near Future
Are you a homeowner in the United States looking for the American Dream? If so, you may be in trouble if you still have an ARM, or Adjustable Rate Mortgage. As you likely know, the last year or two has been very bad for the housing market and ARM rates are one area in which the problem got worse. Yet, many of those who did pick up a loan since 2002 have had that loan adjust already. This is the shock that has hit the housing market. There may be more shock coming.
What’s A Mortgage Reset?
Mortgage resets adjust the interest rate on the home loan a person with this type of loan has. For example, let’s say that you have a home loan with an interest rate of 6 percent for the first three years. You picked up that loan in 2006 and have since had no problems paying your mortgage loan. Now, the reset period is coming to an end and you are worried. When your loan resets, what is the likelihood that the loan will be too expensive for you?
There is a new wave of mortgage resets set to hit the country in the next months, and will likely continue through 2010 as a number of “option ARM’s” were put in place. These are subprime loans and some are not. The point is, they are adjusting in the coming months which will cause a new wave of homeowners unable to pay their payments.
Do Something Now
If you are a homeowner with an option ARM or any other adjustable rate loan, now is the best time for you to make a change. What you will need to do is get that loan refinanced as soon as possible, before the loan is in fact adjusted.
FHA can help you to get into a more affordable loan if your loan has recent or will do so prior to the end of 2010. This will be an outstanding opportunity for you to get a lower interest rate, fixed loan that likely could save you a substantial amount of money.
The worst thing you can do is wait it out. Right now, interest rates are very low. Even those with credit scores that are low may qualify (currently the FHA will accept credit scores at 580 or above.) You have the opportunity to save substantially.
Estimates are that some $500 billion worth of mortgages will be affected in the next four years by these adjustable rates. The FHA can help many to get out of this problem.
Tags: FHA Loans, Home buying, loans, mortgage
