DWCAP –
I agree with you. Those with teaser (neg-am) payments will still be screwed. Those with Interest-only options will also see a substantial jump (say 20% or more) and those in this second group that did not plan ahead (by saving) or who haven’t experienced at least 4% annual raises will also get pinched.
The wild card of course is rates. Inflation expectations could result in higher rates down the road … say a year from now. If short-term rates returned to their recent peak (up a couple percent from current rates) the payment shocks would be difficult for anyone to absorb.
It isnt as bad as the numbers make it seem, but it isnt as good as the interest rates make it seem either.
Well said.
