From today’s SFGate, “After hovering near historic lows through much of the spring and summer, rates for both long-term and short-term mortgages have climbed markedly during the past two months, taking a bite out of buyers’ borrowing power and forcing Steach and others to re-evaluate their financial plans. In particular, those with adjustable mortgages — in which payments float up or down periodically depending on the direction of short-term interest rates — have seen big swings in the past 12 months or so.”

“The benchmark 30-year fixed mortgage, the preferred loan for generations, is not an option for many borrowers whose only chance to get into the high-flying real estate market these days is an adjustable loan. Around the Bay Area, about 80 percent of new home buyers are taking out adjustable loans as opposed to less risky fixed-rate loans — about double the rate of two years ago, according to market research firm DataQuick.”

As long as you have purchased your home smartly, and not paid a all-time high price (comparable to other properties in your neighborhood), even a negative amortization loan won’t be a death knell.

But it’s never a bad idea to call your mortgage broker to check in and see what they can tell you about your current and future situation…

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