A very disturbing finding in my eyes about this survey is that 34% of homeowners with adjustable rate mortgages (ARMS) don't know what they will do when their loan readjusts. Depending upon the amount they owe on their mortgage, some of these very individuals may be staring into the eyes of a payment hundreds of dollars more than their current payment.
Here is a brief overview of other key findings:
HOMEOWNERS:
- 36% who now have an ARM plan to refinance to a fixed-rate loan when their ARM adjusts.
- 28% of those surveyed worry either regularly or sometimes about how they will afford their payments next year.
RENTERS:
- 40% consider affordability the biggest obstacle in buying a house.
- Just under 12% are concerned their credit rating is not high enough to purchase a home.
- 38% would avoid taking out an ARM when they are ready to purchase a home.
Bottom line in my book, and that is currently the one I'm reading, we as Mortgage Professionals need to take added steps to educate clients about the process soup to nuts. I also think it is vital to educate in our schools our youth (Gosh I'm getting old:-) about credit, home ownership, money as it pertains to the real world in general.
Couldn't agree more.
Unfortunately, before getting into this industry I was part of the 40% who thought cost would be my most difficult obstacle to conquer when it came time to purchase a home.
I feel I've taken a lot from this line of work (both professionally and personally), and one of the most important "intangibles" is the free education of how credit works (or doesn't work.)
The most important to remember, is not take that for granted. I'm sure everyone can remember the days they would have rather deciphered the Da Vinci Code than interpret a credit report.
Nice one. Love it. I try to make sure each and everyone of my clients understand to the T on what there product is
Ben
Geoff - Well put and that is something I don't think about enough, the very education I get just being in this business.
Ben - Thanks! That is the way to do it, in the end that will be the difference maker in your career.
I would say that 90% of my clients don't know about mortgages when I first meet them (lot of 1st time homebuyers) but 99% of them know exactly what type of loan they have when the transaction is finished. I make sure they are educated and hopefully most other LOs do the same.
- Tchaka
I'd like to also point out that there are a lot of people in 30-year fixed mortgages who know nothing about what they have. They're merely programmed to think that the 30-year is the only way to go. While that's true for some, it's not wise to assume that's the cure-all.
- Tchaka
I refi'd from a 30 to a 15 and a lower interest rate. I'm one of those people that needs (mentally) to get the house paid off. Though not the prudent financial move (tax write offs and such).... DEFINITELY the right mental move.
Bought the house in 1997, banged on the principle early on....have I think 8 years to go.
Ravi - I don't need a shower curtain. I like basking in the drips of water falling from the shower, as naked as can be. Besides, Namibia loves me like that;)