The Corey Story

Project lifeline was announced today to give homeowners facing foreclosure 30 extra days to resolve their ordeal with their lender in an attempt to prevent the number of foreclosures from piling up to higher totals. This entire housing crunch could have been easily avoided had the homeowners better managed their funds and assets in the first place. All of the people who took out the adjustable rate mortgages and bought huge, eccentric houses to “keep up with joneses” are now foreclosing because their ARM rate is raising their monthly mortgage to numbers they simply cannot come up with. This whole ordeal is a perfect example of Americans indulging to extremes they cannot afford. Every family wants the best. It is human nature to want to have the nicest things, the nicest cars and of course, the nicest home. However, when did the screws come lose for these people to make them for one second want to take out an ARM? The adjustable rate mortgage was an awful idea in the first place and should have been avoided at all costs. My personal theory is this: take a fixed mortgage out for a specified time frame that is well within budget. There is no point in risking taking a lower ARM to buy a bigger house because, as we are seeing now, once the ARM rises it becomes impossible to pay for these outlandish dwellings. Check back tomorrow for a new post on how to properly balance risk vs. reward and how common sense should ultimately serve as the deciding factor.

[ratings]

This entry was posted on Tuesday, February 12th, 2008 at 12:10 pm and is filed under Finance. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.