Interest only mortgages are just as they sound. You only pay the interest and none of your mortgage payment goes to pay down the principal. If you start out with a $150,000 interest only mortgage and you make all your payments, you will end up still owing $150,000 at the end of the interest only [...]

Subprime mortgage defaults, the underlying cause of the real estate, mortgage, and financial market implosion and the drag on our economy, will soon be finished. Subprime mortgages are ARMs which adjust and it’s this adjustment to a higher payment that triggers default and eventually foreclosure. Subprime ARM Resets There is some debate about whether payment [...]

Negative equity is reported today to have occurred in almost 30 percent of homes purchased in the last five years and 45 percent in homes bought in the last two years. Negative Equity Explained Negative equity occurs when the home value is lower than the mortgage balance, also referred to as being “underwater” or “upside [...]

An adjustable rate mortgage is one where the interest rate can change periodically. Many people do not think they have an ARM because of the initial fixed rate portion of the mortgage. But if the rate can ever change..even once..it’s an adjustable rate mortgage. Adjustable Rate Mortgage Definition The 5 1 adjustable rate mortgage was [...]

Currently (April of 2008), the 30 year fixed par rate, the rate a good shopper could get, is around 5.75%. This is a good rate to “fix in” for the long haul. Given our current administration “likes” the dollar at all-time lows, sooner rather than later, rates will have to rise. Getting caught in an [...]