Fitch said Citigroup would be rated down from BBB, downgrading it from a stable A-plus outlook, to a negative outlook.Fitch is one of the top ratings agencies on the world and has been a major factor in the ratings of major corporations including Citigroup and Bank of America.The bank has also been the subject of a class-action lawsuit.The rating agency said in a statement on Thursday that it had ...
Higher interest rates on mortgages could help keep the U.S. housing market buoyant in the second half of the year.
But it may also trigger a wave of defaults, according to new research from the National Association of Realtors (NAR), a nonprofit research group.NAR research finds that borrowers are more likely to default on their mortgages when the rate is rising faster than the rate on the market.
That is, when the interest rate is 1.4% on a 30-year mortgage, and 5.6% on the same 30-month mortgage.NARP, which is nonpartisan, also found that the median monthly payment for borrowers with the highest mortgage payments was $2,856.
That’s more than $1,000 more than the median payment for those with the lowest mortgage payments, at $1 the median.
And borrowers with large credit scores are more at risk of defaulting on their loans.
The NAR said in a report last week that homeowners with lower incomes have been “pushing up prices and raising the cost of mortgages by as much as 25% in some states, and many borrowers are at risk.”
It added that borrowers with low credit scores were also less likely to refinance their mortgages and were more likely than those with higher credit scores to default.
Nars’ research showed that homeowners who paid $600 or more in mortgage interest in the first quarter of the decade had the highest average mortgage payment in 2016, and the median household payment was $1.9 million.
That was about $2 more than in the same quarter a year earlier, when NAR found that those with credit scores of 660 or higher were the most likely to have a mortgage payment of more than that.
The average monthly payment of borrowers with high credit scores, however, was $732, and that payment was about 10% less than that of those with lower credit scores.
The median monthly payments for those whose credit scores dropped to 660 or below in the previous three years were $1 and $1 per month, respectively.
In contrast, the median mortgage payment for people with credit cards with the maximum credit score was $4,000, and those with less than 660 credit scores paid about $3 per month less than those who had credit scores that were 660 or above.