There is one looming factor that is on the horizon that needs to be considered. Many people purchased homes with 80/20 mortgages. An 80/20 mortgage is when you purchase a home with a 80% first mortgage and a 20% 2nd mortgage. The 2nd mortgages were at a higher interest rate and many were adjustable rate mortgages (AKA Arms). The plans were for home owners to refinance the 2 mortgage in a few years before the interest rates adjust. Then the market changed!
Lenders/investors will no longer finance the 20% 2nd mortgages. Many new home buyers will be stuck with their ARMs. This means many ARMs will adjust upward and your monthly payments may become out of reach. You can hope for some appreciation and then perhaps get a new 2nd mortgage for 10%.
I strongly recommend paying additional principle now to your 2nd mortgage so that you can refinance your home later or at least be in a financially secure place in the near future. To learn more about the Charlotte Real Estate market including questions about your mortgage contact Rick Waite @ 704.770.6559 or visit my websites at Charlotte NC Real Estate today.
