From the AP via Yahoo Business:
Survey: Rising Rates Worry Homeowners
By Eileen Alt Powell
Homeowners with adjustable-rate mortgages worry about rising interest rates, but many believe they will be able to refinance their loans if necessary, according to a study released Monday.
An survey of homeowners conducted for Wells Fargo & Co., the San Francisco-based bank, found that about one in seven respondents had an adjustable-rate mortgage, or ARM.
With an ARM, the interest rate rises or falls, often in lockstep with an underlying security such as a Treasury bond.
The study found that nearly 80 percent of homeowners with ARMs said they were “somewhat” concerned, “very” concerned or “extremely” concerned about rate increases.
But more than half said they believed they could refinance their loans. And about 20 percent said they were prepared for rate adjustments and didn’t plan any changes.
Woo Ho said that one surprising finding was that younger homeowners — especially those born since 1964 — view their homes as a good investment as well as a place to live.
Overall, 72 percent of those surveyed said that the equity in their home was their most important investment, she said.
“That’s a shift,” Woo Ho said. “A home is now considered a major part of homeowners’ financial portfolios.”