Mortgage Rates and Options Rise in San Francisco

Author:	Lucas Jones
Source:	Homes Discovered
Date:	April 21, 2006

Recent mortgage rates have hit the highest point in years which will most likely slow home sales in San Francisco.  Home prices are continuing to climb which means that home buyers need low rates to afford to buy new homes.  Many lenders now offer creative mortgages in an effort to lure more home buyers back into the San Francisco market. Creative mortgages such as interest-only programs, piggyback loans, payment option loans, and adjustable rate mortgages are tempting offers but for many first time home buyers they can be misleading.  Some loan options lead consumers to take out a loan amount that is too large based on their income.  On paper it may look affordable but once you extend much of your monthly income on a mortgage, you may struggle to meet other financial obligations.  Interest-only mortgages may appear to look good because they make the monthly payment less, but those home buyers are not building equity on their home People need to be careful when they choose alternative loan options.  If they are not paying for it in the interest rate, they will be paying for it somehow in the cost.  The best way to protect yourself is to talk to a mortgage broker you trust and have them explain every aspect of the options you have in order to make the best informed decision.

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