The property market remains a considerable concern for the federal government, both in terms of the treatment of home owners and the issues caused by negative equity. Just last month, five of the largest U.S. banks agreed to provide a $25 billion settlement to homeowners who had been the victim of improper foreclosure practices, while figures from the last quarter of 2011 also revealed that 23% of U.S. mortgages were underwater, according to the National Association of Realtors. These figures reveal the dangers facing homeowners and families in 2012, and, along with otherconsiderations, dictate the need for a careful and well-thought-out decision-making process prior to purchasing a property.
Choosing Your Mortgage: Pick the Right One for You and Your Partner
In some ways, couples looking for properties in the current market have an easier choice than those who bought during the housing boom. The high-risk and stated-income mortgage types that were created to suit unqualified borrowers are no longer available, as lenders have strived to adapt to the changing macro-environment and new government legislation. Today's house hunters generally have to choose between fixed and adjustable rate mortgages, and must select the right one to suit their financial circumstances. This tends to suit couples rather than individual buyers, simply because applications that boast dual incomes have a better chance of succeeding in the current market.
In some ways, couples looking for properties in the current market have an easier choice than those who bought during the housing boom. The high-risk and stated-income mortgage types that were created to suit unqualified borrowers are no longer available, as lenders have strived to adapt to the changing macro-environment and new government legislation. Today's house hunters generally have to choose between fixed and adjustable rate mortgages, and must select the right one to suit their financial circumstances. This tends to suit couples rather than individual buyers, simply because applications that boast dual incomes have a better chance of succeeding in the current market.
Fixed rate mortgages offer the lowest risk for couples who are looking to buy, simply because the rate of interest remains unchanged throughout the duration of the loan. This ensures that monthly repayments remain consistent over time, which makes it far easier for you to budget and meet your requirements as a debtor. With an adjustable rate mortgage rate (ARM), the rate of interest is liable to fluctuate considerably in line with market conditions, and while this may cause your monthly liability to decrease, it is more likely to adjust upwards and increase your burden. Your salary constraints and potential for future earnings should therefore be influential in your decision... read more.
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