Interest Rates Impacting Foreclosures

Fountain Valley, CA, June 28, 2006 --(PR.com)-- As of last Friday, June 23, 2006, interest rates have gone up again. Bankrate.com shows that last week’s 5/1 Adjustable Rate Mortgage (ARM) was at 5.95% and today the rate is at 6.07%. The 30 year Fixed went from 6.24% to 6.35, 15 year Fixed, was 5.95% to 6.04% today. (Rates displayed are accurate as of 06/26/2006)

Increasing rates are having an impact on foreclosure rates. Prospective homeowners will try to qualify for a home but in some cases have chosen to go with an ARM rather than a fixed rate.

When rates go up, ARM payments will also increase. An example an easy ARM payment for $1400 per month could potentially go up to $1900 per month. If the homeowner cannot pay their increased mortgage, they have only two choices, they can either try to sell their home or allow the lender to foreclose on the property.

Of course, foreclosure properties attract Real Estate Investors. With foreclosure rates increasing in certain areas, an investor may benefit from an unfortunate event by purchasing a property from an auction.

Sites like PoliceAuctions.com give their subscribing members the ability to search over 2600 government auctions from their database and access to foreclosure property listings nationwide.

Real Estate Investors following this trend will be watching the Fed’s next move. Thursday June 29, 2006, 2:15pm EST, the Federal Open Market Committee will make its decision whether a rate hike will be made. Changes in the interest rates will generally have a direct impact on short term ARM payments, causing payments to go up and squeezing more people into foreclosure.

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