Author: By Jasen Lee Desert News
Results from the Deseret News/KSL TV survey of 404 Utah residents, conducted by Dan Jones and Associates via telephone from April 21 to April 24, showed that nearly 60 percent of respondents said they have fixed-rate mortgages on their homes, while 3 percent said they have adjustable-rate home loans. The poll had a margin of error of 5.2 percent.
Utah Apply For Mortgage
Among those surveyed, 87 percent said they were current homeowners or in the process of purchasing a home, while 10 percent said they were renters. Of those with adjustable-rate mortgages, 45 percent of those people said it was not difficult to meet their house payment, while 45 percent said it was somewhat or very difficult to do so.
The number of respondents identifying themselves as having adjustable-rate mortgages was small — just 11 people — so the margin of error for the question was high, at 20 percent, making the statistic less reliable, said Dan Jones and Associates research director Diane Meppen.
Although the number of poll respondents who had adjustable-rate mortgages was small, the impact of those types of loans on the current housing situation is being felt in Utah. The number of foreclosures in the Beehive State increased 34 percent from the fourth quarter 2007 to the first quarter of this year, according to a recent RealtyTrac report.
Utah ranked 18th in the nation in the number of homes in foreclosure. One in every 274 households in Utah had received a foreclosure filing in the first quarter, compared to the national average of one in 194 households.
UT Refinance Home Mortgage
Many homeowners who currently have adjustable-rate mortgages are trying to make the transition to a conventional fixed-rate loan to avoid the potential financial consequences.
Brian Miller said he and his wife purchased their Herriman home in 2005 using an adjustable-rate mortgage. At the time, it made the most sense, he said, because it was their first house and they were newlyweds.
"We did a five-year ARM thinking we weren't certain we were going to be there longer than five years," he said. "We were kind of looking at it as a possible investment opportunity, but we've loved it out there and decided we'll be there awhile."
When they initially took out the adjustable-rate loan, it had a lower interest rate for the first five years of the loan, and they believed that the lower payment would allow them to strengthen their financial circumstances as the adjusted to married life and paid off wedding expenses. Since then, Miller said, they have watched the housing market change and believe it is time to pursue a more stable financial option.
David Jensen, executive director of the Utah Mortgage Brokers Association, said that in the past year, conforming lenders have tried to avoid adjustable-rate mortgages, because the current interest rates on home loans were so low that lenders did not consider adjustable loans to be useful. In the past six months, the best pricing has come from 30-year fixed-rate mortgages, he added.
Miller said he is actively seeking to refinance his current five-year adjustable-rate mortgage loan to a conventional loan.
"With rates today so low, we figured we'd be better off if we nabbed a 30-year fixed now," he said.
Avoid Foreclosure
Print this page