Time Bomb; Adjustable Rate Mortgages Set to Deliver Rate Shock
New Haven Register › August 30, 2007
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Summary
They seemed like a smart investment at the time and, for some, offered the only path to home ownership, but adjustable rate mortgages likely will soon give borrowers "payment shock," experts say. "People who have these mortgages will be hit fairly hard," said James Paley, executive director of Neighborhood Housing Services of New Haven.
Adjustable rate mortgages, or ARMs, have a fixed introductory interest rate for a certain period of time and then adjust - typically annually, and usually based on U.S. Treasury securities - based on market rates.See the full content of this document
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Time Bomb; Adjustable Rate Mortgages Set to Deliver Rate Shock
With lower introductory "teaser" interest rates about to reset based on climbing market rates, the increase in monthly ARM payments could be considerable, said Donald Klepper-Smith, chief economist at DataCore Partners in New Haven.
"It ...See the full content of this document
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