Low Mortgage Rates to Help Some ARMs

According to the Treasury Department, there is an expectation that over 420,000 homeowners mortgages will be adjusting this year due to their adjustable rate mortgages.  Many used their home using a hybrid mortgage so they could afford a much larger home in hopes they would be able to refinance in a few years.

Times have certainly changed and rates are planning to adjust this year, with many homeowners unable to pay the new amount.  The good or bright news is that rates are at an all time low, to be exact, 37 years low!  The large issue that home values have decreased dramatically over the past 2 years which means that homeowners will be unable to refinance because they will owe more than what their house is worth.  It’s a huge issue and will be seen for quite sometime till the housing market has time to recover.

While the government has taken some involvement to keep things afloat, interest rates are tied to real estate sales.  But there is no guarantee how things will play out for 2009.  If you have a home to sell in 2009, a short sale is a much better alternative.