Massachusetts residents sweat it out
On the back of a 50% jump in property prices in Massachusetts the highest in the country, residents took fashionable mortgages, which were extremely attractive when the interest rates were low, but are turning ugly now.
The rapidly increasing realty prices induced buyers to stretch themselves and take the maximum possible loan including 100% financing. With the interest rates having shot up, their monthly payouts have risen drastically and for some the recourse to refinancing is also not possible as they financed their properties to 100% value.
These residents can recourse to selling their properties and closing their loans, but effectively, with the realty markets being on the soft side, these residents will be in a no profit situation. If these residents wait and want to exit their properties later, the realty prices may have actually slipped and they will not even recover enough to close out their mortgage.
Click here to find out more about the plight of the Massachusetts' residents.