ARM or FRM? 34% of homeowners don’t know
 

NORTH PALM BEACH, Fla. – March 26, 2007 – More than three in 10 homeowners (34 percent) do not know what type of mortgage they own, according to a new poll released by Bankrate.com. Furthermore, 28 percent of those surveyed worry about how they will afford their payments. The national poll reveals the confusion and anxiety that homeowners are experiencing today.

Another notable finding is that 34 percent of homeowners with adjustable rate mortgages (ARM) do not know what they will do when their loan readjusts. Bankrate calls that a “staggering statistic” since the adjustment could tack several hundred dollars onto their monthly mortgage payment.

“Clearly, many homeowners are uninformed about their mortgages,” says Greg McBride, senior financial analyst at Bankrate.com. “With interest rates stabilizing, it’s a very good time to assess whether they should refinance or not. Now may be the time to lock into a mortgage with a fixed rate which remains near historic lows.”

Other key findings of the poll that studied homeowners include:

• 36 percent of homeowners surveyed with an Adjustable Rate Mortgage (ARM) plan to refinance to a fixed-rate loan when their ARM changes

• 28 percent worry either “regularly” or “sometimes” about how they will afford their payments next year

• 57 percent of homeowners have a fixed-rate mortgage

Key findings of the poll that studied homeowners include:

• 40 percent of renters consider affordability the biggest obstacle in buying a house

• Just under 12 percent are concerned their credit rating is not high enough to purchase a home

• 38 percent would avoid an ARM when they’re ready to purchase a home
 

To view the complete results, go to http://www.bankrate.com/mortgagepoll.
 

The study was conducted by the polling firm GfK Roper via telephone among a nationally representative sample of 1,004 adults, aged 18 or older. The sample was collected March 16-18, 2007, using a Random Digit Dialing Methodology. The data is weighted by age, sex, education, rate and geographic region. The study has a 95 percent confidence level and a plus or minus 3 percent margin of error.

 

© 2007 FLORIDA ASSOCIATION OF REALTORS®

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