Do you have an adjustable rate mortgage? Have you seen your mortgage payment increase repeatedly over the last few years? Mortgage Expert Jim Kemish revisits the recent dramatic changes in the interest rate environment and discusses an exciting new mortgage product that just may offer the perfect combination of low payment and long term stability that you are looking for.
The Good Old Days
Ah, remember the good old days when the Federal Funds rate was 1% and the Prime Rate was 4%? This was the case in 2004. It0s amazing what a couple of years can do. The change began in June of 2004 with the first of the Federal Reserve rate hikes. We didn0t know it at the time but that rate increase was to be the first of many. By June of 2006 the Federal Reserve had increased the rates seventeen times.
The Beginning of the End
As interest rates went up mortgage applicants began to turn towards adjustable rate mortgages to minimize their home payments. There is a bit of irony in this fact. Adjustable rate mortgages, by definition, adjust. And in an upward rate environment those adjustments will result in higher future interest rates for borrowers that opt for […]
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As the mortgage industry has changed in recent months and many of the more liberal mortgage programs have been cancelled, borrowers have gone in search of home financing that will accommodate their credit and income profiles. Florida mortgage expert Jim Kemish discusses the amazing Fannie Mae American Dream Initiative and how it might make your dreams come true.
The End of an Era
In October of 2006 the subprime home loan industry begin to break down. Wall Street investors, monitoring the default rates of mortgage portfolios and concerned about the continuing drop in real estate prices nationwide decided to stop purchasing subprime loans. By March of 2007 the entire subprime industry as we knew it was gone.
The Past
First time home buyers had taken advantage of the easy guidelines offered by these lenders and had flocked to the real estate market in droves. Over the last five years approximately twenty-two percent of all homes purchased utilized these subprime mortgage products.
The Changing Market
With the demise of the subprime industry millions of potential home buyers are now searching for alternative mortgage products that will accommodate their financial and credit profiles. Even more significant are those millions of people that have already purchased homes with subprime […]
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Over 20 percent of all mortgages originated from 2004 through 2006 were subprime mortgages. Nearly one quarter of all American homeowners in recent years purchased homes using subprime mortgage programs. The majority of these programs have now been eliminated. Mortgage expert Jim Kemish discusses the potential impact.
The End of the Subprime Industry
In late 2006, as real estate values continued to fall, the subprime lenders that made it possible for these borrowers to own homes begin to shut down. Within a period of 90 days between December of 2006 and March of 2007 the entire subprime industry as we knew it, vanished. And as these lenders either shut down or tightened their guidelines, millions of potential homeowners have discovered that they don0t qualify for mortgage financing anymore.
The Real Issue
As disappointing as it may be for those millions of hopeful homebuyers now discovering that they no longer qualify for home loans, the real problem lies elsewhere. Subprime mortgage programs, as accommodating as they were of borrowers0 credit profiles, were strictly structured to compensate the lenders for taking on the additional layers of risk associated with these poor credit loans.
The Adjustable Rate Impact
With few exceptions these loans carry adjustable rate features which are […]
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