Many people took out adjustable rate mortgages during the Great Housing Bubble. After 25 years of steadily declining interest rates, people forgot about, or never knew about the risk of rising interest rates and what it would do to their housing payments. Adjustable rate mortgages are great while interest rates are declining. Their payments are lower than fixed rate mortgages, and as interest rates decline, they become an even better deal. However, when interest rates go up again, these loans will become a nightmare.

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Many people took out adjustable rate mortgages during the housing bubble. After 25 years of steadily declining interest rates, people forgot about, or never knew about the risk of rising interest rates and what it would do to their housing payments. When interest rates go up again, these loans will become a nightmare.

Source: The Real Articles: Finance | Stock Market Investing

The fluctuation in mortgage interest rates has implications for when it the best time to buy and the best time to refinance a home mortgage. It is a popular misconception that low interest rates make for a good buying opportunity. It is not. Buy when interest rates are high, and refinance when interest rates are low.

Source: The Real Articles: Finance | Stock Market Investing