Quick, what’s the ‘riskiest’ year in the life of a mortgage from a lenders perspective? Think it’s the first? Guess again.
“Although borrowers are often told that the first year is the hardest, delinquencies have historically reached their highest points during the third and fourth years of mortgages…After years of strained budgets, borrowers may have little in savings to draw on to handle a crisis; this is also the period when major repairs begin to crop up; finally, many home buyers go through life changes, including starting a family.”
In the Bay Area, this is also the period during which many adjustable rate mortgages re-set. And despite all the 30-year fixed rate subterfuge, please keep in mind that short-term interest rates have continued to rise.
∙ The “danger years” for homeowners [CNNMoney]