More home owners entered the foreclosure process during the first three months of 2007 than the final quarter of 2006, according to a report by the Mortgage Bankers Association. The MBA’s Chief Economist Doug Duncan predicts that delinquencies would continue to rise, peaking later this year. The percentage of loans in foreclosure would be well below the average of the last 10 years were it not for Ohio, Michigan, and Indiana. The rate would have fallen were it not for the big jumps in California, Florida, Nevada, and Arizona. Those states have special circumstances that do not reflect what is happening in the rest of the country. With interest rates as high as they've been in 10 months, homeowners are refinancing in droves to fixed rate mortgages. That could be a smart and timely move for those who can qualify for the switch. But Refinancing can be almost as confusing as your first mortgage application a higher rate on a Fixed Rate Mortgage (FRM) now could be a better deal than holding onto an Adjustable Rate Mortgage (ARM) in the process of upward interest rate adjustments. It's a lot easier to budget for a mortgage based on a fixed rate rather than scramble every six months or so to keep up with adjustments on an ARM. If you are worried about an ARM do something about it. If you take responsible steps to save your mortgage and work to avoid digging yourself in deeper. At the first sign of trouble, before you miss a payment, contact your lender and stay in touch until you are in the clear. Explore all the REFI options available before settling with a lender.
Options include: Modifying your current mortgage. Working with the original lender. Finding a new lender. Taking cash out when refinancing.
This week's Real Estate Insight: Refinancing a mortgage, especially an ARM, can bring big savings. But for some, it may not be the best financial move. The first step is making sure your credit is in good shape and then consult with a trusted mortgage broker who can help find the best mortgage for your particular situation.
