The next two years will tell the tale of what will happen with homeowners with adjustable rate mortgages (ARM). To understand the problem here’s a scenario: Ed and Edna James purchased a 180,000 dollar house an financed it with a 2/28 ARM. The couple has a combined income of $30,354. Right now they pay $1265 dollars monthly. When the loan is fully indexed the couple will pay a whooping $1990 dollars a month leaving them about $125 dollars for food, utilities, fuel, etc. Hopefully, the fictitious Ed and Edna spent the two years of the low rate getting their credit in order and are now able to get a fixed rate mortgage loan otherwise they will be unable to pay their mortgage and will have to move.
Read Sam Ali's story
Technorati: NJ Real Estate News, Real Estate, NJ Real Estate Blogs, NJ Housing, New Jersey, ARM, Mortgages
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