(PRWEB)  The Mortgage Bankers Associations report that in the first quarter of 2007 the percentage of subprime ARMs that started the foreclosure process climbed to a record high. Analysts estimate that nearly 2 million ARMs will reset to higher rates this year and next. Option ARMs can become so costly they push homeowners into financial crisis. Homeowners can avoid “Payment Shock”, losing their home, and destroying their credit, by refinancing into a less risky mortgage with an online lender.

Option ARMs initially offer the chance to “qualify” for a more expensive home, minimize monthly payments, and achieve greater flexibility of managing monthly cash flow in the beginning of a loan. However, the initial rates are subject to a periodic change or “reset”. Interest rates on loans, and the monthly payment, could increase dramatically. In some case, Option ARM payments can double overnight. Online mortgage lenders and LoanSpace.Org provide the tools, information, and resources to help homeowner’s with their home and credit.

Option ARMs offer minimum payment, interest only, 15-year amortized, and 30-year amortized options. They can be especially attractive to homeowners who have irregular incomes such as educators who do not work during the summer months, salespeople whose commissions fluctuate, and college graduates about to begin lucrative careers.

Conversely, industry experts and Former Federal Reserve Chairman Alan Greenspan warned that many consumers were using the loans to purchase homes they could not afford. Many consumers gambled on the “housing boom” and purchased expensive homes they could “flip” in a few short years for a quick, big profit. Unfortunately, the hot housing boom has cooled considerable in many areas, and several major markets are experiencing a big drop in home values. Buyers who purchased more home than they could afford or made the minimum payment often wind up in serious financial trouble. [read more]