What do you want of Mortgage Interest Rates Today ?.
If you refinanced your old mortgage or purchased your home with an Adjustable Rate Mortgage, you might wonder what will happen once the first period of your loan ends. Many homeowners that financed their homes with these risky changeable interest rate mortgages are in for a shock when the mortgage lender adjusts the interest rate and monthly payment. If you are one of these homeowners, here is what you need to know to protect yourself from a mortgage payment crisis.
Many homeowners purchased homes while the new housing boom that they naturally cannot afford. These homebuyers noteworthy for the loans using interest only or selection mortgages because they could not qualify for a primary mortgage to buy their dream home. Buying covering of your means is the first sign of issue when it comes to personal finance.
Mortgage Interest Rates Today
Homeowners in this situation that can afford their monthly mortgage payment while the interest only or selection period may find they cannot afford the mortgage payment when this period ends. If you have one of these loans you should chronicle your compact to find out when the interest only or selection period expires. This timeframe commonly lasts for five years; after this time the mortgage will turn your loan to a standard adjustable rate mortgage amortized for the remaining term of your loan.
What does this mean for you? If your mortgage was a thirty year interest only mortgage with a five year interest only period, the mortgage payment will be based on a 25 year payment agenda at the end of the interest only period. Not a big deal right? It means your monthly payment will be much higher, not naturally because the interest rate has gone up, but because you now have less time to pay back the full amount of your loan than if you used a primary mortgage to finance your home.
The bottom line is that you may not be able to afford the payments once your loan is converted. If you are arrival up on the end of your first period and do not know what your monthly payment will be, you should palpate your lender immediately and ask about the change. If you do not qualify to refinance the mortgage and will not be able to afford the payments, you may need to take on a second job or consider selling your home.
You can learn more about your mortgage options, including tasteless homebuyer mistakes to avoid by registering for a free mortgage guidebook.
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