Adjustable-rate mortgages, known as ARMs, are back, despite having earned a bad reputation at the height of the housing crisis. Post-crisis borrowers saw them as risky because of their changing interest rates and blamed the glut of foreclosures on the inability of homeowners to handle higher payments when the loans reset. "ARMs became a four-letter word after the housing crisis," says Ann Thompson, a retail sales executive for Bank of America in San Francisco. "They got a bad rap and were lumped in with 'pick-a-payment' loans, which allowed people to pay as little or as much as they wanted on their mortgage."Lately there's been a resurgence in ARMs. In January 2019, 8.6 percent of new mortgage loans had an adjustable rate, compared with 5.5 percent in January 2018, according to Ellie Mae, a software company that processes 35 percent of mortgages in the United States.One reason for the resurgence could be the safeguards in place that make today's ARMs less risky than those approved … [Read more...] about Adjustable-rate mortgages: Are they worth it?
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By Brittany De Lea Published December 13, 2018 U.S. Economy FOXBusiness Facebook Twitter Comments Print video US new home sales tumble in October Tri Pointe Group CEO Doug Bauer discusses how new home sales have tumbled in October and the Federal Reserve’s interest rate hikes. While the housing market was a centerpiece of the 2008 financial crisis, its stagnant recovery could actually save it from a downturn in another potential recession. Continue Reading Below “Because of the fact that it has been underperforming during the economic recovery, there is less room to go down,” Lawrence Yun, chief economist at the National Association of Realtors, told FOX Business. “I think the housing market would not see any big negative hit if there was an economic recession.” Yun said in the event of a recession, interest rates are likely to decline, while the Federal Reserve could halt rate increases and even cut some … [Read more...] about Housing: The new recession-proof investment?
As re-appraisals drop, businesses should consider SBA-backed loans as a way out Mark Abell Published 2:30 pm CST, Wednesday, December 5, 2018 Photo: Skynesher | Getty Images Photo: Skynesher | Getty Images Image 1 of / 1 Caption Close Image 1 of 1 Photo: Skynesher | Getty Images Rising Interest Rates Are Creating Refinancing Headaches for Small Businesses 1 / 1 Back to Gallery The recent rise in interest rates is resulting in large drops in property valuations, making it harder for small businesses to refinance their commercial real estate loans. This looming cloud is gathering even with a robust U.S. economy and regardless of whether the businesses' underlying performance is … [Read more...] about Rising Interest Rates Are Creating Refinancing Headaches for Small Businesses
LONDON (Reuters) - British banks approved the fewest mortgages for house purchase since March last month and demand to refinance home loans also fell following the Bank of England's interest rate rise in August, industry data showed on Wednesday. The number of mortgages approved for house purchase dropped to a six-month low of 38,505 in September from 39,241 in August, down 6.7 percent on a year earlier, the seasonally adjusted figures from UK Finance showed. Britain's housing market has slowed since the Brexit vote in June 2016. Most of the weakness has been in London and neighbouring areas, which have also been hit by a rise in purchase taxes for property worth over 1 million pounds. Net mortgage lending dropped to 1.550 billion pounds last month from 1.617 billion pounds, the weakest since January. "The mortgage market softened slightly in September, following strong remortgaging activity in the months preceding the recent base rate rise," UK Finance's managing director of personal … [Read more...] about UK mortgage approvals drop to six-month low
By Ilyce Glink and Samuel J. Tamkin, Tribune Content Agency Published 5:00 am CDT, Friday, October 12, 2018 Q: I was offered a mortgage "recast" and I need help evaluating if it is a sound financial move. My home is worth $250,000. I owe about $68,000, as I have been paying additional principal on the loan. My understanding is that when you do a recast of your mortgage, the lender simply takes the existing balance and adjusts it to the current amortization schedule. The appeal of having my current monthly payment lowered is attractive in case of a job change or if something happens and I suddenly earn less. I would still pay additional principal and pay off the loan sooner but would have the peace of mind knowing I only owed a lower payment each month. How do I measure the difference between my payment now and what it would be after a recast in terms of interest paid? All of the online calculators require a lump sum payment to the principal upfront, so I'm not sure I'm … [Read more...] about How to achieve a ‘home run refinance’