As many recent homeowners have discovered, the only mortgage that offers a predictable payment plan is the 30-year fixed. Sure, the interest rate may be higher than for an adjustable rate mortgage, but fixing the rate shields the borrower from interest rate risks and rising mortgage payments—risks that have only now become apparent.
Homeowners who had taken out 3- or 5-year adjustable rate mortgages a few years ago are now facing higher monthly mortgage payments as banks prepare to reset the interest rates on their loans. Since interest rates have rebounded from their historical lows, you may find yourself unable to make your mortgage payments. Potential options include refinancing the loan, renting a room or the house, selling the house, or consulting with a legal professional to see what other avenues remain open.
Here are some articles to consider:
- U.S. Home Foreclosures Up 42 Pct in 2006 – Study.
- Foreclosed: The Number of Metro Detroiters At Risk of Losing Their Homes Skyrockets.
- Colo. Reclaims Foreclosures Title.