Home » Foreclosure Resource Center » Are Fixed-Rate Loans About To Vanish
|
HUD, for it's part, has already given in to international pressures. Instead of using Treasury securities for FHA adjustable loans, it began insuring ARMs last August with rates based on the LIBOR index -- the London Interbank Offered Rate. The use of the LIBOR index is designed specifically to make mortgage securities backed with FHA loans easier to sell worldwide. While there will surely be fixed-rate mortgages in the future there’s little doubt that such loans over time will be increasingly difficult to get. Borrowers who want fixed-rate loans will soon pay a significant premium for such financing, even borrowers with great credit and substantial equity. The growing investor preference for adjustable-rate mortgages does not mean there will be fewer mortgages, it does mean that the risk of inflation will increasingly rest with borrowers. The bottom line: If you’re now in the market to finance or refinance it would be a particularly good time to consider fixed-rate loans — while you can. ***Peter G. Miller is the author of the Common-Sense Mortgage and is syndicated in more than 100 newspapers.*** |
|
