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|");document.write("ARMs Making Comeback as Mortgage Rates Rise|
As the Federal Reserve embarked last year on what economists have predicted will be an ongoing program of interest rate hikes, Connecticut banks have since increased mortgages with adjustable rates -- a major contributor to the Great Recession of 2009 when homeowners borrowed at lower, initial rates, then could not keep up with ballooning payments as interest escalated on a contractual schedule.
Adjustable-rate mortgages made up 22 percent of all mortgages outstanding in Connecticut as of June, according to a Hearst Connecticut Media analysis of ARM and overall mortgage data on file with the Federal Deposit Insurance Corp. That represented a 1 percent increase over the intervening year, despite the Fed's Open Market Committee having hiked four times since June 2017 the federal funds rate that governs the interest banks charge their own customers for mortgages and other loans.
Of some 40 banks based in Connecticut, more than half reported an increase in ARM loans outstanding, with the overall total up 5.4 percent to $6.7 billion, with year-over-year differences stark in some cases
");document.write("Many Caveats for Reverse Mortgages
Tom Selleck never explains the fine print.
And that's a problem, some critics say.
In a commercial hawking reverse mortgages, the television actor doesn't tell people how they could get into trouble with the product, a special kind of loan that allows borrowers aged 62 and older to convert a portion of their home's equity into cash.
While some say reverse mortgages are useful because they allow the elderly to age in place, many others have recounted harrowing experiences -- including foreclosures -- in Philadelphia, which until recently was the city with the highest rate of reverse mortgage originations in America. (Origination refers to the application and processing of a reverse mortgage.)
Some believe that reverse mortgage lenders have targeted minority homeowners in low-income neighborhoods with the zeal of predators.
");document.write("Understanding How Mortgage Interest Rates Work
Question: What do home mortgage loans (including second mortgage loans), retail installment loans, automobile loans, home improvement loans, and mobile home loans, have in common -- aside from being loans to consumers?
Answer: The interest charge sometimes is calculated monthly and sometimes daily. With a monthly interest rate the borrower is charged for each month, whereas with a daily interest rate the borrower is charged for each day.
Why is this distinction important? Because daily rates are a potential trap for unwary borrowers, countless numbers of whom have found themselves permanently, usually with no understanding of how it happened. The problem has been entirely overlooked by regulators, including the Consumer Financial Protection Bureau.
");document.write("Early Mortgage Payoff Benefits Depend on Variables
Question: I will soon make our final mortgage payment. My wife will retire in two years and I will work to age 67. We are both 60 today. Because I don't get a pension I really have been looking forward to this final payment.
We bought the house 25 years ago, but I shortened the term of the loan by refinancing to a 15-year loan in 2003. Are we doing well to have the mortgage paid off by age 60? --T.M.
Answer: Paying off a mortgage before retirement is sort of the baseball-and-apple-pie of retirement. It's a feel-good way to create a sense of security in your later years.
");document.write("Mortgage Borrowers Should Know Their Rates
Not knowing your mortgage rate can be an expensive mistake, especially in this rising interest rate market.
Yet nearly three-in-10 mortgage borrowers (29 percent) either didn't know their mortgage rate or wouldn't say, according to a survey by Bankrate.
This is a big problem, says Martin Choy, operations manager at Westwood Mortgage in Seattle.