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70 of California Homeowners have Adjustable Rate Mortgages

According to DataQuick Information Systems the use of ARMs peaked in May 2005 at 73.3 percent. This was notably compared to the real estate cycle of 1988 when ARMs accounted for 66.1 percent of all home purchase loans.



More than $2 trillion of U.S. mortgage debt or about a quarter of all mortgage loans outstanding, comes up for interest-rate resets in 2006 and 2007 --Wall Street Journal Online



Most consumers are unaware of the fact that their rate and their payments are getting ready to increase dramatically. And unfortunately, there are also cases where the consumer may be unaware that they even have an ARM, let alone it is getting ready to adjust very soon. Many economists are concerned that when the payments start to increase, it will have a massive impact on consumer spendingwhich in turn, will impact the US economy as a whole.



Given the 73.3% of purchase mortgages utilizing ARMs it is dually noted that the overall approximately 70% on Californian'ss have Adjustable Rate Mortgages.



Tips for homeowners:

Review their Note (a document of many in the package of documents received when they closed)

Look for verbage stating the loan is an Adjustable Rate Mortgage

Talk to a Mortgage Professional/Strategist

Clearly it is imperative that homeowners understand their situation and are educated to know what their choices are now.



Angela Talent is the local mortgage industry expert who is prepared to discuss these issues, and potential solutions for the homeowners in the Sacramento area. Angela can be contacted at 916-838-2488.

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