America's Silent Mortgage Crisis
ago congress projected a $5.5 trillion surplus. At current
spending levels our country is faced with a $2 trillion
dollar deficit spread out over ten years. This is disastrous!
Economists have said that a perpetual $200 billion dollar
deficit could drive interest rates up by 2% or more.
This doesn't bode well for the housing boom.
30% of new loans are Adjustable Rate Mortgages (ARMs).
ARMs allow home purchasers to have a very low initial
interest rate that increases over time. ARMs typically
match LIBOR interest rates. When interest rates are
down, ARMs are great. Unfortunately, interest rates
fluctuate with the whims of current events. Current
events such as war, deficit spending, weak U.S. dollar,
and/or a recession, negatively impact interest rates.
Primarily affecting homeowners with ARMs and new home
no Federal Reserve bailout on the horizon. They have
lowered the rates to a 41-year low of 1.00%. Altogether,
this means that over the next year ARMs homeowners will
have to deal with increased mortgage payments of 50%
"Reprinted from Zongoo.com
Daily Press & Consumer Information"