No Debt Deal Could Affect Mortgage Rates

ATLANTA,None — Some metro Atlanta homeowners could be facing higher mortgage payments if the U.S. misses a Tuesday deadline and defaults on its debt.

"The interest rates will definitely go up," Silverton Mortgage loan originator Jasmine Krnjtin told Channel 2's Richard Elliot.

Krnjtin believes a U.S. debt default will mean a lowering of the nation's credit rating, and that, in turn, will mean the U.S. will have to pay higher interest rates on that debt. She thinks that will translate into higher interest rates across the board.

"It's going to mean that people who have adjustable rate mortgages, their rates are going to go up. People are going to have higher mortgage payments," she said.

Krnjtin also said her northeast Atlanta office has been receiving calls from people wanting to lock their mortgage rates in, even before they've finished negotiating a deal to buy a house.

"I think there's a lot of anxiety in the market," said Krnjtin.

Another mortgage expert thinks slightly higher interest rates have the possibility to help metro Atlanta's ailing housing market. He told Elliot that if potential home buyers see that rates can go up from historical lows, it might induce them to buy homes now before the rates go up even higher.

Financial planner Charles Heinz of Heinz and Associates in Vinings believes the debt crisis is not as dire as some people make it out to be. He thinks there could be some short-term volatility, but little long-term impact.

"If they don't reach that deadline, I don't think it's going to have a real large impact long term on the average American who has their money in a 401K," Heinz told Elliot.

Heinz said the political wrangling over the massive federal debt is actually healthy for the country because politicians need to address the debt issue. He also believes setting deadlines like the one on Tuesday is also good. But he added that average homeowners shouldn't lose sleep over the perceived crisis.

"We're going to be able to tackle this," he said. "Americans have tackled many difficult situations in the past. We'll be able to tackle this, and America will thrive."

Heinz also cautioned people who are considering cashing in their 401Ks before the Tuesday deadline.

"Those folks who sold out in 2008 and went straight to cash, they got hurt badly," said Heinz. "Those who stayed in the marketplace ended up being able to be OK and came on back."

Still, the political infighting in Washington has irked a lot of Atlantans who are tired of the politics.

"I hate to see the politics that are going on," said Alex Cardona. "Whatever is in the best interests of the country is what we need to just go ahead and do."

"I mean it's ridiculous that they can't decide on anything," said Ron Rabin as sat at the Varsity Restaurant in Midtown and watched news coverage on the debt crisis. "They get together and they bicker back and forth and say each party is to blame. They're all to blame."

And spreading the blame to both Republicans and Democrats seems to be a theme among many Metro Atlantans who are tired of the political arguing.

"They should be working for the benefit of all Americans," said Harold Dennis as he ate a Varsity chili dog. "We all learn to disagree on things, but you compromise, and I really don't see a lot of compromise. That's hurting our country right there. We have to come together. I mean, if there's ever a time we're going to work together, it should be now."

WSBTV