More bad news for [tag-tec]ARM’s[/tag-tec].
As [tag-self]interest rates[/tag-self] rise, their pain increases.
As of last month, rates for a typical 30-year fixed-rate mortgage has risen from 6.32 percent to 6.61 percent. That can add $50 extra to the house payment per month on a $250,000 mortgage.
But [tag-ice]ARM’s[/tag-ice] fare far worse.
Since some ARM’s are now adjusting to the new rates, that could mean hundreds of dollars are added to a $250,000 mortgage per month.
A good question is how will some families cope with rising gas prices? If it now takes $50 to fill up a tiny crossover like an HHR how much more will it take to fill an Expedition’s tank?
These are situations faced across many kitchen tables everyday.
Buy and hold investors need to pay close attention to these details. There will be more houses available for investing as homeowners grow disenchanted with higher costs. More don’t wanters will be willing to bargain to get out from underneath increasingly heavy financial loads.