Have You Checked Your ARM Lately?
June 17, 2008
I am not posting about your throwing arm. I am posting about that Adjustable Rate Mortgage (ARM) you obtained when you purchased your home or when you refinanced your home. For anyone who reads the newspapers or listen to the TV and radio commentators, ARMS are the cause of the rise in foreclosures. With interest rates being relatively stable for the past several years, I was somewhat perplexed until I realized that ARMS were written with teaser (1%) start rates, but really the note rate of the loan was 6-9%. No wonder homeowners were finding that their monthly payments jumped significantly when the teaser rate period came to an end.
So.....if you have an ARM, now is the time to check out what the reset rate will be and when the reset will occur. If it will be soon and significant, it would be wise to call a lender and check on current rates. If you still have equity, you may be able to obtain a better mortgage. If you don't have equity, the lender may be able to aid you in finding one of the programs that can rewrite upside down loans.
Don't put your head in the sand. Know where you are at and take the steps that will take your home ownership into safer territory.
I am not posting about your throwing arm. I am posting about that Adjustable Rate Mortgage (ARM) you obtained when you purchased your home or when you refinanced your home. For anyone who reads the newspapers or listen to the TV and radio commentators, ARMS are the cause of the rise in foreclosures. With interest rates being relatively stable for the past several years, I was somewhat perplexed until I realized that ARMS were written with teaser (1%) start rates, but really the note rate of the loan was 6-9%. No wonder homeowners were finding that their monthly payments jumped significantly when the teaser rate period came to an end.
So.....if you have an ARM, now is the time to check out what the reset rate will be and when the reset will occur. If it will be soon and significant, it would be wise to call a lender and check on current rates. If you still have equity, you may be able to obtain a better mortgage. If you don't have equity, the lender may be able to aid you in finding one of the programs that can rewrite upside down loans.
Don't put your head in the sand. Know where you are at and take the steps that will take your home ownership into safer territory.
posted by shirley harry at 9:05 AM
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