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Apply Here to Refinance your Mortgage and Get up to 4 Free Quotes from Lenders Immediately!Mortgage holders beware. You may love your mortgage now, but a short glimpse into the near future may make you wish you could do it all over again. A recent report from the Federal Deposit Insurance Corp (FDIC from here on out) has caused financial advisors everywhere to stay alert regarding mortgage rates and risky loans. The housing market isn't exactly like it was a few years ago, when many of you out there got your mortgages. In the past few years, many borrowers have opted for high-risk loans, and today's housing market is causing the FDIC to issue warnings to consumers. The growing number of people taking out risky mortgages, or exotic mortgages has professionals worried, since now that interest rates are higher, we could see a collapse of the houseing market as more and more people fall behind with monthly payments due to increased interest rates.The number one type of risky mortgage is the Adjustable Rate Mortgage, or ARM. This type of mortgage looks great at first glance because it's offered at an initially lower interest rate than say a traditional thirty year fixed-rate mortgage. The drawback to the lower initial rate is that the rate is not stable. It fluctuates with market rates, and now that interest rates have risen, peyments are ARMs are higher than just a few years ago. Another type of risky mortgage is an exotic mortgage called the interest only mortgage. This is even riskier than the ARM, and results in the borrower paying lower initial monthly payments that rise drastically after a few years. The high numbers of homeowners with risky and exotic mortgages has the FDIC worried. If you have an exotic or high-risk mortgage right now, one thing you can do to help yourself to avoid delinquency and even foreclosure is to refinance. Essentially, by refinancing you are trading in your risky loan for a new loan with new terms. You are trying to minimize the risk further down the road, and lower your payments for the long term. It will save you money, for example, if you get a fixed-rate loan before rates go even higher, and your ARM begins to mirror even higher mortgage rates, sending your monthly mortgage payment through the roof. If you decide that refinancing might be a good idea for you, make sure you apply to more than just one potential lender. Each lender has its own terms and is willing to negotiate to different levels with you, so definitely compare refinance packages before you commit. And remember, you don't even have to commit to any lender who contacts you. Applying here is free and there is no obligation. You are in control. |
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