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Adjustable Rate Mortgages in the News

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  • Adjustable Rate Mortgages in the News

    Front page story on this evening's
    A 5.7% rate going to 9.9% ? Is that true?

    Further, millions of Americans who have financed their homes with adjustable-rate short-term mortgages — some of which require interest-only payments — are starting to see their monthly payments rise as low introductory rates expire and market rates kick in.

    I just cringe every time I get that bill, said Mindi Davis, 35, who took out an adjustable-rate second mortgage two years ago for the home she shares with her husband and two children here. The bill, which was $100 a month in May 2004, is now $219 a month and climbing. I anticipated an increase, Mrs. Davis said, just not this much that quickly.

    Brian Wrage, who lives in Tampa, said he had begun to unload his investment properties in part because of the adjustable-rate mortgages attached to them. My second mortgage on one property started at 5.7, and by the time we sold it three years later it was 9.9, Mr. Wrage said. It was eye-opening: adjustable rate means up.

    The rising costs have contributed to a 38 percent increase nationally in home foreclosures in the first quarter of this year over the same period in 2005. Florida had the second-largest number of foreclosures in the nation during that period — 29,636 — behind Texas, which had 40,236. Of the Florida foreclosures, 195 were in Brandon.

  • #2
    Yeah, if they were sub prime and bad negotiators I could see that.