Homeowners’ Worst Fear: Over a Third of Homeowners with Adjustable-Rate Mortgages Fear Inability to Pay If Rates Increase
November 2, 2006
DULLES, Va.--(BUSINESS WIRE)--A new national AP/AOL Real Estate poll reveals that 36% of homeowners with adjustable-rate mortgages (ARMs) say they are concerned that they won't be able to afford payments if their rates increase. At the same time, more than a third (35%) of likely future homebuyers say they will seek an ARM.
In addition, according to the poll, younger people, those with less education and lower incomes, unmarried adults, and minorities are more likely to seek an ARM. The poll also found that those who think housing prices will increase are inclined to seek an ARM in spite of that, as are first-time homebuyers.
“Adjustable rate mortgages are a gamble for homebuyers. And with housing prices often out of reach, it can seem like a saving grace,” said Samara Jaffe, head of AOL Real Estate. “The risk of an ARM can pay off, but it’s vital that future homebuyers are well-informed about all their mortgage options and shop around before making this type of major financial commitment.”
Other key poll findings include:
- 62% of all homeowners have a home mortgage; 22% of those have ARMs
- Rising mortgage interest rates (84%) was cited most often as something future homebuyers worry about when thinking about buying a home
- Slightly more future homebuyers are anxious about the affordability of mortgage payments (65%) than are concerned about being able to pay for a down payment (58%)
Source: AP/AOL Real Estate