Is the mortgage crisis getting worse?
As we all know, the economy is in trouble right now. It started with the subprime mortgage blow up and it went downhill from there. As bad as it is, experts believe the mortgage crisis will get even worse. Current market conditions are likely to result in an even bigger foreclosure boom, with option ARM mortgage payments going up rapidly in the near future.
Across America, the housing market is far from normal. Stability isn't coming anytime soon if we look at the recent spike in inventory caused by foreclosures and homeowners sizing down. The added inventory on the housing market is causing prices to drop sharply. Seeing that many homeowners are having trouble selling in today's market, we might see another increase in foreclosures in the near future.
Option ARM mortgage interest rates are predicted to go up, which will cause a whole array of problems on its own. Before the mortgage crisis, an option ARM mortgage was a great option for homeowners that wanted greater control over monthly payments.
Before the mortgage market blew up, option ARM mortgages were a great option for homeowners that wanted more control over the required monthly payment. However, with the current market conditions, option ARM interest rates are likely to spike. This will cause a surge in the required monthly payment for homeowners. The added burden of a couple of hundred dollars in extra mortgage payments may be too large for many households.
Because of lower home prices, many people will discover they owe a big debt on a house that's worth a lot less than they think. Combine this with higher unemployment rates, and a second tidal wave of the economic crisis is on the horizon.
Across America, the housing market is far from normal. Stability isn't coming anytime soon if we look at the recent spike in inventory caused by foreclosures and homeowners sizing down. The added inventory on the housing market is causing prices to drop sharply. Seeing that many homeowners are having trouble selling in today's market, we might see another increase in foreclosures in the near future.
Option ARM mortgage interest rates are predicted to go up, which will cause a whole array of problems on its own. Before the mortgage crisis, an option ARM mortgage was a great option for homeowners that wanted greater control over monthly payments.
Before the mortgage market blew up, option ARM mortgages were a great option for homeowners that wanted more control over the required monthly payment. However, with the current market conditions, option ARM interest rates are likely to spike. This will cause a surge in the required monthly payment for homeowners. The added burden of a couple of hundred dollars in extra mortgage payments may be too large for many households.
Because of lower home prices, many people will discover they owe a big debt on a house that's worth a lot less than they think. Combine this with higher unemployment rates, and a second tidal wave of the economic crisis is on the horizon.
About the Author:
Adviseur Mijn writes articles about mortgages in English and articles about beleggingshypotheek and oversluiten hypotheek rente in Dutch.
posted by Credit Counseling at
2:29 AM
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