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For Longer-term Mortgages borrowers are now Refinancing

10/01/2007

A vast majority of homeowners are entering a major payment shock unless they decide to refinance, Specialists said. This is simply because homeowners aiming towards the deadline took out mortgages which were structured so then borrowers paid interest for the 3, 5, or 7 year initial terms. As soon as the rates reset, homeowners will be facing higher interest.

It's a double-witching hour," Spoke Melissa Cohn, the lady of CEO Manhattan Mortgage and known the biggest mortgage broker in the metro region.
Homebuyers who feel they will be selling their property in less than a decade, today there are many mortgages with fixed interest for 7 years, the average rate of 5.876% for $500,000 loans, she spoke. Homeowners with an adjustable rate of 10 year fixed rate have 6.0% rates.

In comparison, 30-year fixed mortgages totals an average of 6.25% in the vicinity. The homebuyers who are looking to trade an unsecured higher payment later for huge savings now may be in a position for an adjustable.
There are a few home loans, which hold a malevolent surprise for borrowers who do not take time to read the small print.

"It makes them sleep better at night." Said Michael Moskowitz (mortgage lender). His clients suggested that, People with a good credit rating to avoid adjustables in whole and stay with fixed-rate mortgages