Mortgage Refinance Gets Tougher For Home Buyers

(EMAILWIRE.COM, June 18, 2007 ) SACRAMENTO, CA - People who want to sell a house fast or to find a way to refinance their home mortgage are finding it harder today compared to years in the recent past. Interest rates are rising and home buyers are being turned away by mortgage lenders due to tightening underwriting and credit standards. And, while this is happening, millions of homes in America are forecasted to enter the foreclosure process this year and the next.Freddie Mac, one of the United States’ largest purchasers of mortgage loans, reported recently that national averages for 30 year fixed rate mortgages rose from 6.18% in January of 2007 to 6.74%. This change over the life of a loan can add thousands of dollars in extra costs. First-time homebuyers are also negatively affected by a rise in interest rates because they correspond with higher monthly payments.While the low interest rates of recent years have been seen as a boon to the economy, they also helped create the conditions for a downturn in the housing market. Many mortgage loan borrowers, especially those with poor credit histories who are known as subprime borrowers, borrowed very large sums in recent years to buy houses without even proving their incomes. Many of these people used what are known as adjustable rate mortgages (ARMs) in order to do this. When the markets stopped going up in 2005 many people were surprised, especially those who say they planned to sell or refinance their houses within a few years.One problem with ARM loans is that they, after an intial one or two year introductory period usually, readjust to much higher payments. Many borrowers report that they had no idea that their payments would jump significantly. Congress is attempting to wrestle with this problem, but attempts to create clear and simple disclosure language in mortgage contracts can be anything but easy.According to real estate and foreclosure expert Patrick McGilvray, President of Sacrament-based http://www.TheHomeBuyingCenter.com, “Approximately $100 billion worth of adjustable rate mortgage loans will face readjustment in the fourth quarter of this year. This means, unfortunately, that we have not seen an end to the bad news currently being generated in American housing market.”If interest rates do fall towards the end of the year as some experts are predicting, the housing market will no doubt breathe a sigh of relief even if other indicators do not improve.Contact:Patrick McGilvray, J.D.888-444-BUYERhttp://www.thehomebuyingcenter.com###This press release was issued through GroupWeb EmailWire.Com. For more information on press release distribution, go to http://www.emailwire.com.

Patrick McGilvary, J.D.
Patrick McGilvray, J.D.

Patrick@thehomebuyingcenter.com