Thousands of homeowners are about to get slammed with higher monthly payments
By Samantha Delouya, CNN
Published 4:00 AM EDT, Mon July 1, 2024
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Andrew Marquis, a loan officer in Lexington, Massachusetts, said he has recently seen a dramatic increase in ARM loan applications. Homebuyers increasingly believe that the Federal Reserve will cut interest rates in the next few years, giving these buyers time to refinance their loans before the clock on the fixed period of their ARM runs out, he said. The Fed doesn’t directly set mortgage rates, but its actions influence them. This year, the Federal Reserve has signaled that it may possibly cut its benchmark interest rate one time.
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I guess no one learned anything from the 2008 Housing bubble.
If you need an adjustable rate mortgage to afford the house, that’s a red flag that you can’t afford it.
If the max increase is more than you can afford, then you are rolling the dice. If the professionals knew what the interest rates would be, they could make a fortune in the options market. Instead they are selling you mortgages.
For the average Joe Six-Pack, 30 year fixed is still the best buy; unless you can afford a 15 year fixed.
Argh!
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