|
|||
A look at how the mortgage loan industry has changed and how that affects you
What has changed in the mortgage loan industry
However, many subprime lenders began to lose money as more homebuyers defaulted on their loans than expected. As a result, stock markets experienced major lows and a number of mortgage companies went under. Now, ARMs (adjustable mortgage rates) are expected to skyrocket as mortgages reset and many people who were able to buy homes will now have to pay much larger house payments than they can afford. How the changes affect you Many people who don't have the good credit required to get a mortgage with a good interest rate rely on subprime loans to get them into homes. However, many lenders are no longer giving out subprime loans as more and more homeowners are defaulting on their loans. As a result, lenders have been losing money and are unwilling to take the chances on subprime loans anymore. This means that those who were hoping to get into a home with poor credit or an inability to consistently pay the mortgage will have a very difficult time finding a loan. For people who were able to get a subprime home loan with what many experts call "teaser rates" (low interest rates for the first few years that keep the payments down), can expect their housing payments to go up anywhere between 10 and 50% as the rates reset. This will force many families into foreclosure as they will be unable to make their mortgage payments. The good news in all of this is that new changes in the mortgage loan industry will also make it difficult for lenders to finance people who can't really afford a home or who are at a greater risk of losing it. Stricter laws require them to better disclose terms and risks associated with home ownership, hopefully allowing more people to keep their homes.
More Small Business Info Articles:
|
|||
Copyright 2003-2020 by BusinessKnowledgeSource.com - All Rights Reserved
Privacy Policy, Terms of Use |