 Articles tagged: DTI.
<< previous page 1 next page>> written by Dale Rogers
One has to wonder about borrowers signing up for a new Option ARM (Adjustable Rate Mortgage) with negative amortization and low teaser rates really know what is ahead of them. The slick computer models showing ‘what if scenarios’ make the case based on given assumptions. The term negative amortization is something that will be in front of their faces real soon. With a minimum payments starting in 1%, 2%, 3% etc. the real fully indexed rate which includes an underlying base of a chosen index plus the margin to make the real rate ticking away at maybe 4% to 6% higher. This thereby guarantees a negative amortization mortgage loan increases monthly or whatever adjustment period that is signed up for in the ARM instruments. written by Dale Rogers
Areas of the country that have enjoyed a big run up in values the past year are now paying for it. Local tax assessors doing their jobs, based on comparable sales, are moving assessed values up to increasingly high levels. Housing affordability is a function of interest rates, housing prices and the taxes and insurance and income levels of the citizenry. With the recent run up, in some cases the property taxes have more than doubled.
What is particularly disturbing is that many municipalities (NOT ALL OF COURSE) are awash in cash with this new surge in revenue. These governing bodies have the power to reduce the mill age rates to offer some sanity to these homeowners. Yes, there are always projects and departments that can use more cash, but every stinking penny of it?
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