As the Federal hold Bank continues to push the interest rate higher, homeowners are watching their adjustable rate mortgage payments inch up as well. One of the ways to stop your rising mortgage cost is to refinance to a 30-year fixed rate mortgage.
"The plan is for the feds to keep raising rates until inflation comes down.' says mortgage broker Mike Johnson. "Expect higher interest rates for home equity through 2006 and then we should see the feds pulling back the rates." We've already noticed a trend of home prices dropping because the rising interest rates preclude new purchasers from jumping as quickly. A modern newspaper narrative shows some homeowners slashing prices naturally to get a bite.
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What's odd is homeowners are accepting higher interest rates from a 30 year fixed rate mortgage for the safety of locking in the interest rate. If their equity is taking a hit, some homeowners might try to refinance their entire debt to a acquire fixed interest rate.
