Understanding The Fear Of Mortgage Interest Rates
With all of the fuss that has been talked about over the past year with the mortgage rates and how everyone is ending up in foreclosure, many people have been fearful of buying a home. But the fact of the matter is, the percentage of actual homeowners in the country who are fine and those who are unable to keep up with their mortgage interest rates, is pretty shocking. By the way the news media talks, you would assume every neighbor you have is facing foreclosure. But, the fact is that most people are all right either because they can afford the mortgage interest rates they signed for or that they were smart enough to get a fixed rate.
Most people who are first time home buyers get suckered into signing for an arm loan which simply means that their mortgage interest rates can change every six months or every year after their initial two or three years in the home. A lot of people do not prepare for the interest rate change as they either forget about it all together or figure it can't be too bad. But sadly for some, there are loans whose mortgage interest rates have gone up several percentages which means several hundreds of dollars a month in increases.
How To Prevent Problems
The best thing to do is to stop the problem before it can actually happen. If you have not yet signed for your loan, talk about getting a fixed rate mortgage. The mortgage interest rates with these might be slightly higher then what they can offer you in the beginning of an adjustable rate mortgage but it will save you money and heartache down the road. Do not let the fact that you would be signing for a one and a half percent more then the arm, because within two years, your interest rate will still be the same and with the arm loan, it could have raised five percent or even more.
The thought process that you must keep going is about long-term stability instead of the instant feeling of reward. If you jump the gun too soon with mortgage interest rates, you will surely be paying for it in the long run. Take your time before agreeing on any sort of loan and make sure you think about all of the problems that could come your way in the future. While your current financial status supports these mortgage interest rates, will it support them if you end up in different work or someone needs surgery? Just take your time and think about all of your options and you will be fine.
