Old news but still bad news

Regarding the last entry about the mortgage tax. Someone wrote that the figures presented were confusing. Please consult a mortgage broker regarding this subject particularly one with expertise in the New York Market. They will be able to help you.

This is an old article I found from USA Today about ARMS.

Scary days could be ahead for adjustable-rate mortgages For millions of homeowners with adjustable-rate mortgages, it's gut-check time.
by Sandra Block - USA Today - (4/04/2005)

Short-term interest rates have been rising steadily since they dipped to record lows last spring. The average initial rate for a one-year ARM is now 4.33%, up from 3.46% a year ago, according to mortgage giant Freddie Mac. So if your one-year ARM is about to hit its first birthday, you're going to have to dig deeper to pay the monthly mortgage bill.

Most ARMs contain caps on how much their rates can increase each year. But even with those limits, an adjustment can be painful.

Many borrowers who took out a one-year ARM at 3.5% last year will see their rate adjust to about 5.5%, says Keith Gumbinger, vice president of HSH Associates, a mortgage-consulting firm. On a $250,000 mortgage, that works out to an additional $297 a month.

Borrowers who used short-term ARMs to buy homes they couldn't otherwise afford may find themselves unable to make the higher payments, says Barry Glassman, a financial planner with Cassaday & Co. in McLean, Va.

Despite the risks of a big upward adjustment, ARMs are more popular than ever. More than 36% of mortgages had adjustable rates last week, according to the Mortgage Bankers Association. That's the highest since the trade group began tracking adjustable-rate mortgages in 1990.

Economists say rising rates for 30-year fixed-rate mortgages have stoked the popularity of ARMs.

The average rate for a 30-year fixed-rate mortgage was 6.04% last week, the highest since June.

In addition, homeowners have become more sophisticated about mortgage products, says David Lewis, executive vice president of ING Direct.

Watch your backs people. We are walking on dangerous ground. Look at your numbers and resources and be prepared to be take a hit if the time comes.