As amazing as the following sounds, I have to say I am not exactly shock.
BankRate.com commissioned a poll that showed that 34 percent of American homeowners had no idea what type of mortgage they had.
The subprime mess is not so surprising when you realize more than a third of homeowners don't even know whether they have a fixed-rate, adjustable-rate or other type of mortgage.
"'That's a symptom of the complexity of the mortgage market today,'" says Ken Wade, chief executive officer of NeighborWorks America, a nonprofit organization that provides financing and training to neighborhood-based housing organizations."
Sure, with so many new mortgage programs, the industry is increasingly complex, but how hard is it to know basic information about your own mortgage?
According to the poll, 57 percent of homeowners with mortgages said they have fixed-rate mortgages (see Bankrate.com chart at right), 9 percent have some variety of an adjustable-rate mortgage. Those individuals who knew they had an adjustable-rate mortgage (ARM) were asked what they planned to do when the interest rate adjusts. Thirty-four percent said they didn't know what they'd do.
A significant number of homeowners (28 percent) said they worry either regularly or sometimes about how they're going to afford their mortgage, property taxes and homeowners insurance. Nearly 70 percent said they rarely or never have such worries, Bankrate.com reported.
"Though a majority (57 percent) of homeowners who have a mortgage say theirs is a fixed-rate loan, nearly a quarter (24 percent) of renters said they would avoid taking out a fixed-rate loan."
People want to "avoid" a fix-rate loan? That doesn't make a lot of sense to me. It's one thing to decide an ARM is best for your particular situation, but avoiding a fixed-rate mortgage appears to indicate obvious confusion.
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