real estate for bargain prices."
A little fixer-upper might be
just the thing...
Posted on 09/05/2006 2:01:48 PM PDT by ex-Texan
With millions of adjustable-rate mortgages about to reset this fall, experts expect a wave of foreclosures by Americans in every income bracket. Here's why they could soar in late 2006 and beyond:
Those easy-mortgage chickens are coming home to roost.
This fall the adjustable-rate mortgages (ARMs) that millions of Americans took out during the recent housing boom will be reset, and many homeowners will see their monthly mortgage payments shoot up by as much as 20%. According to the Mortgage Bankers Association, of all mortgages financed in 2005, 36% were ARMs -- the highest ever.
This is a matter of concern because ARMs are typically initially made at a lower rate and then increase after a fixed period of time, usually one, three, five, seven or 10 years, after which the rate will more closely reflect current rates. As interest rates increase, mortgage payments increase. Between $400 billion and $500 billion in ARMs are due to be reset by the end of 2006. The following year will be even more dramatic, when more than $1.5 trillion will be reset.
For many Americans, this is scary news, if hardly unexpected. * * * [M]any of them are finding themselves stuck in a house they may soon no longer be able to afford, and, as the real estate market peters out, there's little they can do about it. * * *
Unprecedented situation:
* * * A major concern is that the number of ARMs issued at subprime rates to borrowers with lower credit ratings is not known. "We know that ARMs default at a higher rate than fixed, and subprimes default at higher rates than primes," says Sharga. "Never have so many ARMs reset at the same time. There is no precedent for it."
(Excerpt) Read more at realestate.msn.com ...
WHY??? It's HAWAII! Give me ten reasons, cost aside why SoCal is better than Hawaii. And I'm not trying to be rude, I'm serious!
LOL, whenever it does, I want to be there to scoop up some real estate CHEAP.
How anybody could still have an ARM after fixed rates have been at historically low rates for several years now is beyond me. It's ludicrous. Absolutely no sympathy.
Weather #1, isolation#2.
Of the dozen or so couples that have moved there over the years none of them lasted over 2 years before they moved back to So. Calif., they coudn't stand it.
Even a Japanese contractor that I know that was left a large amount of acerage there by his mother goes over and builds one house for sale every year and comes back to his home in So. Cal.
OK. All valid points.
How about Southern Utah? Arizona? Florida? Alaska? I dunno.
What's wrong with Hawaii weather?
Too humid sndf hot psrt of the year.
I like it being in the 70s all year.
Are you in San Diego?
Been to all of them and wouldn't consider them.
All the years that I had an airplane and traveled for hunting, fishing, pleasure, etc. i've been most places.
So, you like weather that never requires heating or A/C.
That and I wear shorts to work evey day!
It did get cold enough in the early morning that I did wear long pants half of December and half of January last winter.
What do you do for a living?
Construction, Since I closed the contracting business because of illegals in 1992 I just work for myself by the hour direct for owners.
My husband and I are military. We bought a home 4 years ago and got a 3 year ARM. After 3 years, we sold the house and moved to our last duty station. Our new property has a 15% fixed.
ARMs are really good for folks who *know* they're moving within a few years. They're also good for "flipping" a house for a profit. By getting a 3 year ARM, we saved about $250 a month.
Concur with every thing you say. ARMS definitely have their place. Especially for those in the military who don't live in a house forever. Personally, I'm on a 7 year ballon.
Almost all mortgages, even the "Pay Option" ARMs have their place. The problem lies in every Average Joe getting one. A Neg Am Pay Option is fine as a financial tool for the right person. When it's the ONLY WAY someone can afford the home, then something isn't right. It amazes me that people wanted to own homes so badly that they would take a negative amortization loan as the only way they can afford a home, instead of considering two *gasp* "horrible" concepts:
-move somewhere more reasonable (how DARE someone suggest somebody leave beautiful So Cal/NYC/Arizona/Boston for cheaper pastures)
-don't buy a home
Concur; Choice is good. Unfortunately some "conservatives" here on FR think that the government should limit the mortgage options available in order to "protect" those not as economically savy as they.
Some how, some way....BUSH'S FAULT!!!
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