Interest rates have hit historic lows and homeowners have been in some cases decreasing their rate yearly. These mortgage rate chasers have followed the market and believe a lower interest rate will help make their mortgage payment more manageable. As rates decrease property values have increased. This has caused taxes and insurance for homes to increase as well.

The savings homeowners want from the rate reduction is being stripped away because of increased tax values and increases in hazard and other property insurances. Some homes also have a HOA fee requirement.  In some states like Texas a homeowner could be paying $250.00 for county taxes and $250 for hazard insurance. The loan they have on the home could be under $100,000 making them pay more towards the prepaid’s then for the actual mortgage they have to the lender. How are homeowners keeping up with these costs?

In some cases homeowners outside the VA program are not able to make the mortgage payment or decreased their rate, forcing them to sale their home.

The VA streamline program helps Veterans decrease their rate when other homeowners may be stuck in their mortgage and have no other options. Because of the increased costs instead of paying your home off you may end up just renting it from your lender. The VA program allows for homeowners to stay in their home where other programs could force the homeowner out. Decreasing your interest rate is now used as a way to keep your house instead of pay it off quicker. Ideally you don’t want to be in this situation however keeping a home you love could be your only option until circumstance changes.

Historically low interest rates are here because we need them to survive. Hopefully rates stay low because once they start to increase many homeowners will find it challenging to afford their home. Especially if taxes and insurance prices continue to increase as they have each year.