Why do mortgages or interest or whatever you call it go up overtime?
I ask my Mother why we have to leave our beautiful home, the home that I lived in for almost my entire life she said something about mortgages– now why do they go up? and why is the bank like that! why are they so mean!
is there any chance mortgages will go down before a foreclosure or is it going to rise up every time until the pay is fully reached
Tags: 'interest, Call, Mortgages, overtime, whatever
If a mortgage rate fluctuates… it’s not a FIXED RATE mortgage.
If yours is going up… you have a VARIABLE RATE MORTGAGE. That means from time to time the rate is changed based on prevailing money conditions.
The re-adjust rate varies… but most of them are for 6 months or a year… so… There is not much chance the rate will change soon… sorry.
It depends on the way the mortgage was originally planned.
The banks don’t “do” anything. When we take on a mortgage, we, the consumer, sign on for a plan that meets our needs.
Sometimes that is a fixed mortgage for 10, 15, or 30 years.
Sometimes it is adjustable with the current lending rate, those can go up or down.
So it really depends on the kind each homeowner signs up for.
Sad story. Mortgages are a fact of life. Not many can afford to buy their house with cash. Most tend to change the terms with the bank or lender to get cash out of the house to pay bills and such. That would change the terms. It really depends on what terms your parents made with the bank that dictates the rates.
If the rate was variable, it should be coming down, but not until the end of 2008. There are many programs to help homeowners, but some have some really strong qualifications to apply.
If the foreclosure talks are happening, it might be too late, but bankruptcy may buy some time, if the house is that important.
Your mom ,like so many other Americans..SIGNED the dotted line it’s called an Adjustable rate mortgage..ARM..startsout low (percentage interest rate) and goes up or maybe she just bought some fancy things…and took out a Home equity loan…Say you bought the house for 100K now 4 years goes by and it is reappraised for 150K you can take that 50 out and get a fancy SUV alot of people did that and now politicians are talking about using millions of dollars of taxpayer money to bail some of them out
There are different kinds of mortgages so it depends on the contract your parents signed.
I think a lot of people thought that they would have more income when the mortgage would go up but it just didn’t work out that way.
The banks aren’t being mean, that’s just business.
Sorry about you having to move. I really am.
Interest rates (the fed rate) goes up and down based on what the federal reserve deems necessary to either slow down or encourage the economy. These rates are for banks which loan to other banks which then usually affects mortgages, but only if your credit is good. If you have a fixed rate mortgage, it stays the same rate but you keep building a pile of money onto it each year because of the fixed-rate percentage you are given when signing the papers. If you get an ARM (Adjustable-Rate Mortgage) then your percentage rate increases or decreases as time goes on most usually based on the fed rate.
And when it comes to the foreclosure, you usually don’t see it decrease unless of course something magically happens, like a wad of money comes your way.
if you are on an arm then your rate will change in regards to the current market. It could go up or it could go down. If it goes up your payment goes up.. that is just the nasty nature of the beast. It is not the banks fult.Your mom knew what she was getting in to. somepeople took the arm because it was a lower rate then a fixed rate loan. your mom knew that there was this possablity. I know that is not what you wanted to hear but that is the way the blal bounces
Banks are predators that smell blood and take advantage of every weakness. Unfortunately, in this case, your mother is the prey.
When you first buy a home there are a few different types of mortgages available. Fixed interest rate, variable rate and accelerated rate mortgages are the most common. If your mother’s interest rates are going up now, at a time when rates in general are dropping, she probably has an accelerated rate mortgage. In this case, you don’t pay a lot of interest for the first few years, but after a while those rates start to jump real fast.
If this is the case, its not likely that anything will go down anytime soon. Sorry.
Sounds like your mom got sucked into an adjustable rate mortgage.
At the time the lenders were selling these loans NOT on the risk the rate could escalate but on the fact that the payment was less than a 30 year FIXED RATE.
Lesson to learn from all of this: Beware strangers bearing gifts.
Never assume the best scenario in planning for the future, prepare for the worst and if the best happens its icing on the cake.
Many homebuyer’s today would be fine if they just went for the 30 year fixed rate.
Too many homebuyers were blinded by the lower payment and GREED got the best of them
They did NOT in fact plan for the worst, but expected the best.