Rising mortgage rates and risky loan typesby Tim Manni
I carefully document all of the mentions HSH.com gets in the national media via the HSH in the News page on the blog (top-right corner). Today, HSH.com’s VP Keith Gumbinger was quoted in two articles — one from CNNMoney.com and the other from the San Francisco Chronicle. Both articles provide borrowers with some essential information about the mortgage market as we head into 2011.
By now, most of you are aware that mortgage rates have risen somewhat substantially from their absolute lows. Let’s start by taking a look at the CNNMoney article titled “Kiss 4% mortgage rates goodbye.” While homebuyers and would-be refinancers are definitely sad to see 4 percent mortgage rates go, the experts agree, these rising rates may good for the economy:
Keith Gumbinger of HSH Associates, a provider of mortgage information said that the market reached a new plateau.
“I don’t think we’re going back to a 50-year low anytime soon without an economic collapse,” he said. “Rates will probably never revisit those levels.”
Gumbinger said that demand for homes may be tempered somewhat by the increased mortgage costs and so affect home prices a bit but the improving job picture and better consumer confidence matter much more.
“If the other factors are aligned,” he said, “interest rates are not a big thing.”
For many, the new year is all about resolutions and trying to avoid the mistakes they made the year before. The same can be said for mortgage borrowers. In 2011, mortgage borrowers will be trying to avoid the risky loan products that have put borrowers before them in deep financial holes.
Amy Fontinelle of Investopedia (article appears in the SF Chronicle) shares “5 risky mortgage types to avoid.” But as Gumbinger points out, risks involving mortgage products tend to be less about the product itself, and more about the borrower who applies for that specific product: