Defining Today’s Biggest Risk

By John Doan, president, Miracle Mortgage

The stock market falls. The stock market rises. But real estate values continue to plummet and governments at every level continue amassing unsustainable amounts of debt. Meanwhile, consumers are scared and foreign governments shutter over the absurdly low value of the U.S. dollar. And yet, these are not the biggest risks confronting most of us today. 

To truly locate the risk that presents the greatest peril for most of us, all you need to do is simply look within.

The fact is we cannot control whether a stock will rise or fall in a given day, or if our home or investment property will increase in value. But what we do have complete control over is what we choose to do about it. And remember, doing nothing is itself a choice.

Many of us were very comfortable with our holdings in the summer of 2008, but by Christmas we were all wondering if there would be any assets left to worry about. Ask yourself this, did you do all you could to protect yourself and fully assess your situation?

What happened to your assets and what kind of shape are they in today? What more could you have done? Always remember that advisors, consultants and other intermediaries work for you. You make the final decision, and that means it’s your responsibility to do so on your own behalf.

If you made some big mistakes in the past, I urge you not to make those same mistakes again.

You may not be aware that one in 10 mortgages will have their rates adjust over the next two years. With rates near historic lows, there is nowhere to go but up, and when they go up, they may go up at an alarmingly fast pace.

Understand that mortgage rates are not driven by the short-term, government-controlled "prime rate," but rather by longer-term, market-driven rates that typically closely correlate with Treasury bond yields.

As an example of how fast these rates can climb, take a look at the chart below.

You can see what happened to Treasury yields between December 2008 and June 2009. Rates nearly doubled in less than six months, and market conditions suggest these rates can rise at a very rapid pace, and at virtually any time.

If you have any risk at all of a rate change in your mortgage at any time during the life of your loan, then you need to make sure you’ve dealt with this potentially big risk.

At Miracle Lending, we can give you a free assessment of your current mortgage, and we can review what options may be available to you. Remember, the risk of rising rates or declining home prices is not the main issue facing mortgage holders today. Rather, it’s the risk of inaction in the face of these circumstances that could carry severe long-term consequences. The good news, however, is mitigating this risk is something you can control, and your first step in doing so is to contact Miracle Lending today.

If you’d like more information on how you can get your free mortgage assessment, go to mymiraclelending.com, or call us at 888.536.3453. You also can email me at directly by clicking here.